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Italian Markets Are Having Another Tough Day

  • Italian bonds drop for second day, while corporates also fall
  • Market focusing on risk to Italy’s deficit, says Mizuho
Updated on

Italian bonds slid as the country’s new government continued to unnerve investors and European Central Bank policy makers flagged the prospect of talks to end its debt-buying program.

The declines were led by two-year bonds, which have swung wildly over the past week. Italy’s new Prime Minister Giuseppe Conte passed a confidence vote in the Senate Tuesday following his maiden speech that stuck to a spending platform outlined by the Five Star Movement-League coalition. Investors are also factoring in the potential for reduced support for the region’s debt from the ECB as it may discuss ending quantitative easing at its meeting next week.