Morgan Stanley Says Italy Bond Rally Is Over
- Bank forecasts BTP-bund yield spread to rise back to 210bps
- Goldman Sachs agrees Italy’s fiscal outlook is under pressure
This article is for subscribers only.
Italy’s bond risk premium will surge back to levels seen at the start of 2023, according to Morgan Stanley strategists.
The euro area’s weakening economy, a lack of foreign demand and the potential for increased bond sales by the European Central Bank will weigh on the assets, they said. The rally has already stalled over the past couple of months, with Goldman Sachs Group Inc. betting against the debt as it sees Italy’s fiscal outlook “under pressure.”