MILAN: Italy paid the cheapest seven-year yields in 20 months at auction on Thursday, thanks to solid demand from investors hunting for returns amid a sharp erosion in euro government yields - over half of which are below zero.
Two days after reopening a 50-year BTP bond for 3 billion euros, drawing bids for more than five times that amount, the Treasury raised 5.5 billion euros ($6.2 billion) at auction, at the top of its planned issue range.
A three-year BTP bond maturing in July 2022 was placed at 0.49%, more than halved compared with 1.05% at the previous auction in mid-June and the lowest level since May 2018.
A seven-year note maturing in July 2026 fetched a 1.24% gross yield, the lowest since November 2017, down from 1.96% at last month's sale.
Italy's 10-year yields this month fell to their lowest level since late 2016 after a deal with the European Commission averted disciplinary action over Rome's public finances and thanks to expectations the European Central Bank will retain its ultra-dovish stance under its incoming president, Christine Lagarde.
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