Ondertussen van Bloomberg:
Italian Bonds Slip as Traders Prepare for Final Auctions of 2018
Italian bonds fell as investors prepared for the final euro-area government debt supply of 2018.
Italy plans to sell as much as 2 billion euros ($2.3 billion) of two-year zero-coupon bonds Thursday as trading resumes after a three-day holiday. The yield spread between Italian 10-year bonds and German bunds widened before the Treasury in Rome auctions an additional amount of 5 billion euros of debt Friday, including benchmark five-year and 10-year securities. The FTSE MIB Index of stocks dropped to the lowest level in more than two years.
“The curve is making room for this relatively chunky year-end supply,” said Christoph Rieger, Commerzbank AG’s head of fixed-rate strategy. “At the end of the day, the supply should be absorbed well.”
Italian 10-year yields climbed four basis points to 2.87 percent as of 9:15 a.m. in London, after touching 2.91 percent. The yield spread versus German bunds widened seven basis points to 265, after narrowing to 249 basis points on Dec. 20, the tightest since Sept. 28. The FTSE MIB index fell as much as 0.7 percent.
Italy struck a deal with the European Commission on its 2019 budget last week, avoiding a disciplinary procedure. The nation’s parliament will vote on the budget by Dec. 29, according to La Repubblica, without saying where it got the information.