, Columnist
There's a $40 Billion Reason to Avoid Italy
Fragile politics and the front-loading of 2020 bond sales explain Italian debt’s poor performance. But yield-starved investors won’t stay away forever.
A cold, hard slog for Italian bonds.
Photographer: Keystone/Hulton ArchiveThis article is for subscribers only.
It has been a cold, hard winter for Italian government debt. The country has been the euro zone’s worst performer; for the first time its bonds are yielding more than their Greek equivalents with maturities longer than three years.
Italy’s is the only European bond market whose yield spread has widened compared to the struggling German benchmark over the past three months. It was the best performer over the summer, so what is going wrong?