Italian Bonds Rebound Before Auction That's Seen as Litmus Test
- Two-year notes, which were hardest hit Tuesday, lead rally
- Auction support could come from redemption, coupon cash flows
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Italian bonds rebounded after Tuesday’s unprecedented sell-off ahead of a debt auction that will be a key test of investor appetite.
Two-year notes, which were the hardest hit by the rout, led Wednesday’s gains with those across the curve following amid signs the nation’s populist leaders were willing to soften their stance to solve the political crisis. The debt office will offer six billion euros ($7 billion) of securities at the sale, including five- and 10-year ones.