Italian bonds Yield elevating

LONDON : Yields on Italian bonds are soaring as the political vacuum fuels fears the government won't be able to impleme
02 Aug, 2011

Spain is suffering too, but Madrid is tackling its problems, while Rome is stalling. Given the sheer size of Italy's debt, that's a major concern.

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Yields on 10-year Italian bonds rose to 6.13 percent on Aug. 2, their highest level in the euro's 11-year history.

Yields on Spanish bonds jumped to 6.32 percent, but remained below their historical high reached on July 18.

Italy's Economy Minister Giulio Tremonti called a meeting of the Financial Stability Committee made up of representatives of the government, the Bank of Italy, and the market and insurance regulators. Prime Minister Silvio Berlusconi is due to address parliament on Aug. 3.

Spanish Prime Minister Jose Luis Rodriguez Zapatero, who has called an early general election for Nov. 20, postponed his departure on vacation after the risk premium on his country's debt over benchmark German bonds rose to a euro lifetime high of more than 4 percentage points.

Yields on German 10-year bonds briefly narrowed to 2.395 percent on Aug. 2, falling below the country's inflation rate for the first time in over 50 years.

 

Copyright Reuters, 2011

 

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