Italian Bond Sale Ends with Higher Yields after Election

The first of many expected economic repercussions coming from the results of the Italian elections where not clear government seems in the cards at the moment. This will also have an impact in Spanish bond sales which could finally trigger a request for a bailout.

Italy’s borrowing costs rose sharply at an auction on Wednesday, in the first test of its ability to borrow money long-term at affordable rates after the country’s inconclusive election result.

Italy sold the new 10-year government bonds at a yield of 4.83%, up from 4.17% at its last sale in January.

The yield provides an indication of the yearly interest rate Rome would have to pay to borrow new money.

But it did sell all 6.5bn euros’ worth (£5.6bn) of 10- and five-year bonds.

The new five-year bond was sold at a yield of 3.59%, up from 2.94% in January.

via BBC

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