Laggard-to-Braggart for Italy’s Bonds Enables Talk of 0% Yield
- ECB could see lower yield as a stimulus tool: PineBridge
- Demand falters at latest auction, though QE provides backstop
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The fortunes of Italy’s debt have been transformed this year, with the benchmark 10-year yield on course for its biggest annual drop since 2014, even leading to talk among analysts that it could touch 0% in 2020.
Such speculation would have been highly unlikely 12 months ago, when the bonds lagged their European peers as a populist government threatened to blow the budget deficit wide open. Now, a re-formed coalition government is in place, having avoided snap elections in September and the European Central Bank’s resumption of stimulus has resurrected a major buyer for its debt.