Italian Assets Surge as Coalition Passes Key Test From Five Star

Italian bonds climbed for a third day after Prime Minister-designate Giuseppe Conte won backing to form a new government, tempering political uncertainty and reassuring financial markets.

Ten-year yields dropped to fresh record lows after Five Star Movement members approved a coalition with the Democratic Party, averting the possibility of fresh elections and paving the way for a less hostile stance toward the European Union. The spread over yields on German bonds, a key gauge of risk in the nation, fell to 150 basis points, the lowest level since May 2018. Stocks rallied.