Italy's 10-year bond yield slides to record low as country edges closer to new govt

LONDON: Italy's 10-year bond yield fell to a record low on Wednesday as the country's borrowing costs tumbled on growing hopes that a new government will soon be formed, and new elections averted.

It fell to as low as 1.025%, down 11 basis points on the day, pushing the gap over Germany's 10-year bond yield to 173 bps, its tightest since May 2018.

Tense talks aimed at forming a new Italian government inched forward on Wednesday as two major political parties, struggling to bury years of hostility and avoid snap elections, agreed to re-install Giuseppe Conte as prime minister.