‘Danger Zone’ for Italian Debt the Next Focus for Bond Traders
- Italy 10-year borrowing cost hit 2% for first time since 2020
- Sharper selloff could spur ECB to rethink withdrawing stimulus
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A slump in European bond markets is driving up Italy’s borrowing costs to the point where traders are wondering how much pain policy makers can take before stepping in to prop up its debt.
Benchmark borrowing rates for Italy, one of the euro area’s most indebted nations, hit 2% in the past week for the first time since pandemic-induced market turmoil in 2020. The prospect of reduced stimulus from the European Central Bank means the likes of BlackRock Inc. is betting on its bond yields still climbing further.