Italian Bonds Slide as Nation's Leaders Remain Defiant on Budget

Italian bonds dropped as the government held firm over its budget plans despite pressure from the European Union, markets and opposition lawmakers.

Yields jumped across the curve, with those on 10-year bonds approaching the multi-year highs reached Tuesday. Deputy Premiers Luigi Di Maio and Matteo Salvini asserted that they will push ahead with plans that will blow Italy’s budget deficit out to 2.4 percent next year. Salvini said he was “absolutely sure” the yield spread over Germany won’t break 400 basis points, from around 300 currently. Italian stocks declined.