Bond markets in Italy rallied for a third day amid speculation that eurozone governments would join forces to secure new debt issues next week.
Prices for short-term government bonds have risen as traders have digested several positive developments in the battle against the coronavirus, including President Trump’s insistence that the United States has surpassed the worst.
Italian government bonds maturing in two years fell 0.104% to 0.841%, while longer-dated bonds rebounded less strongly. Bond prices and yields move in opposite directions as they are linked to interest rate expectations.
The spread between Italian bond yields and German bunds narrowed sharply to 2.26% yesterday. This difference effectively represents