, Columnist
Italy's Crunch Moment in the Bond Market
This week's offering needs to be the best of the year so far.
But can Italy’s prime minister convince investors?
Photographer: Alessia Pierdomenico/BloombergThis article is for subscribers only.
Italy’s auction of five and 10-year government bonds on Thursday will be the most important test of investor appetite since the country’s political crisis subsided. Buyers are understandably skittish.
Appetite for the 10-year securities the government sold at the end of May was poor, something I remarked on at the time. Since then, yields on Italy’s two-year bonds have climbed back above one percent, and the premium investors demand to hold 10-year Italian bonds over their German counterparts has increased to 250 basis points, about twice its average this year.