Economics
Bond Traders May Soon Fret More About Italian Debt Than Greece's
- Capital Economics says yield differentials likely to invert
- Greek yields touched the lowest level on record last week
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For European investors, it may now be more risky to hold Italian bonds than Greek ones.
Capital Economics is forecasting that Greece’s 10-year debt, which was for most of this decade untouchable for many investors, will yield less than the equivalent Italian securities by the end of 2019 -- one indicator that they may become a safer asset to hold. That’s due to Italy’s ongoing budget spat with the European Union unnerving investors, combined with an improving fiscal outlook for Greece.