Italy-Germany Yield Gap Reaches Two-Year Low on Rate Cut Bets
- Italy-Germany yield spread falls to 152 basis points
- The moves have been fueled by bets on interest rate cuts
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A key measure of bond risk in Europe fell to the lowest in almost two years as investors pile into higher yielding debt before the European Central Bank starts cutting interest rates.
The difference between Italian and German 10-year yields fell to about 1.5 percentage points, down from 2 points in late October. The spread is closely followed in debt markets as a key gauge of risk tolerance and metric for how investors view Europe’s historically stronger and shakier economies.