Berlusconi Mulls Comeback as Italian Bonds Rally: Euro Credit
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The four-month rally in Italian bonds risks stalling as former Prime Minister Silvio Berlusconi ponders a comeback that will further shake up the political landscape before next year’s election.
Berlusconi’s possible return, a month after he said he wouldn’t run, comes as the extra yield investors demand to hold Italian 30-year bonds instead of similar-maturity German bonds fell to the lowest since August 2011. The market signals investor confidence is returning after the European Central Bank offered a bond-buying backstop to defend the euro and Italian Prime Minister Mario Monti implemented an economic overhaul to contain the region’s second-biggest debt.