LONDON: The cost of insuring Spanish and Italian debt against default fell on Wednesday as investors clung to hopes of more central bank stimulus or crisis-fighting policy action, improving appetite towards debt issued by peripheral countries.
Expectations the Federal Reserve may provide more support to the world's largest economy when it announces its monetary policy decision later in the day, improved appetite for riskier assets including Italian and Spanish debt in early trade.
Europe told a Group of 20 summit it intends to work on concrete steps to integrate its banking sectors, before a European Union summit next week where officials say they will launch the long process of deeper integration.
The cost of insuring five-year Italian debt against default fell 11 basis points to 517 bps, while the five-year Spanish CDS fell 18 bps to 580 bps. Yields on Spanish and Italian 10-year bonds were also lower on the day.
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