LONDON: The yield spread between Italian and German bonds narrowed on Friday ahead of an Italian debt auction which was expected to be well received.
Market sentiment has improved towards lower-rated sovereign debt, after a sale of Spanish bonds and Italian T-bills on Thursday met with solid demand.
The 10-year Italian/German government bond yield spread narrowed 15 basis points to 466 bps -- near its lowest in one month.
The 10-year Spanish/German government bond yield spread tightened 7 bps to 327 bps.
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