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Italy Bonds Fall as Populist Pact Throws Up Uncertainty

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The political upheaval in Italy doesn’t pose a systemic risk, according to Bluebay’s David Riley.Source: Bloomberg
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Italian bonds slumped amid a report that populist parties struggling to form a government would seek a debt write-off involving billions of euros.

The yield on benchmark 10-year notes climbed above 2 percent for the first time since March after Huffington Post reported that talks between the Five Star Movement and the League include plans to seek a 250 billion euro ($296 billion) debt write-off from the European Central Bank. The two parties dismissed the story in a joint statement.