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‘Lo Spread’ Returns as Italian Yield Gap Dominates Front Pages

  • Widening yield gap dominates front pages of Italian newspapers
  • Finance Minister Tria says current spread level ‘unacceptable’
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UBS Sees Opportunity in 2-Year Italian Bonds

“Lo spread” entered Italian vernacular in 2011, when the country was struggling to survive the European debt crisis. Seven years later, financial tensions are rising again and the gap between Italy’s 10-year bond yields and Germany’s is back in the spotlight.

The country’s biggest newspapers are running front-page stories about the bond spread as investors balk at the budget targets unveiled by the populist government last week and the consequences start to hit home. The extra yield on Italy’s 10-year debt touched 308 basis points Wednesday, close to the highest since 2013.