Italian Yields Tumble to Record Low as Coalition Deal Seen Near
- Bonds surge for second day as fear of fresh elections recedes
- Democrats back Conte as Prime Minister after days of talks
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Italian bonds surged to take benchmark yields to a record low as talks progressed to form a new government, reducing the political risk of fresh elections for investors.
Ten-year yields fell below 1% for the first time and their premium over Germany, a key gauge of risk in the nation, touched the lowest level since May last year when the previous coalition was being formed. Disagreements over who would take key roles in a new government showed signs of thawing as the Democratic Party backed the Five Star Movement’s choice of Giuseppe Conte as Premier after days of negotiations.