Italy's Yield Spread Over Germany Hits Highest Level Since 2013
This article is for subscribers only.
A key barometer of risk aversion for Italy flared to the highest level in more than five years as the nation battles the European Union over its budget and faces the prospect of rating downgrades next week.
The extra yield that investors demand on Italy’s 10-year bonds over comparable notes in Germany rose to 324 basis points, the highest level since April 2013. Italy is due to widen its deficit to 2.4 percent next year, putting it in conflict with EU fiscal rules, while S&P Global Ratings and Moody’s Investors Service are due to review the sovereign rating by the end of this month. The nation is currently rated two notches above junk by both.