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Bonds: Italian yields fall to 6.47%

Date: Friday 11 Nov 2011

Bonds: Italian yields fall to 6.47%

The level of Italy’s closely-watched bond yields fell today after the nation’s Senate approved its austerity package, critical to bring the chaotic situation in the country’s debt markets under control.

Amongst the measures approved are reductions in central government expenditures, the implementation of a public spending review and measures to enhance revenues to the tune of €59.8bn in savings, an amount equivalent to 3.4% of GDP.

In turn, that opens the way, partly, to the replacement of the current Prime Minister. Some expect the lower chamber of parliament to vote tomorrow.

By 16:18 in London, the yield on an Italian 10-year government bond was down 41.8 basis points to 6.47%. While this is still at a dangerously high level, it is well below the near-7.5% mark seen just two days ago.

Meanwhile, Spain’s two-year bond yields rose by four basis points to 4.72%, the highest borrowing rate on that security in over three years.

The yield on a 10-year UK gilt rose by 4.7 basis points to 2.28%, while the yield on an 10-year German bund was up by 8.7 basis points to 1.86%.

The US bond market is closed today for Veterans Day.

BC

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