Italy's Yield Curve Is Bearing the Brunt of Fickle Politics

The specter of the euro-area debt crisis still hangs over Italian bonds.

It’s best highlighted by the country’s yield curve, which has swung about violently in recent weeks as the new government’s views on the euro and spending have dominated investor concerns. The difference in yields between the nation’s 30- and five-year bonds will shrink to levels last seen in 2011 as political risks may re-emerge, according to Mizuho International.