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Spread closes nine points down

Still lowest since July 2011

30 December, 18:38
Spread closes nine points down (ANSA) - Rome, December 30 - The spread between Italian 10-year bonds and their AAA-rated German equivalents, the premium investors pay to hold Italian paper, on Monday closed nine points down on Friday's mark of 225 points, at 216, its lowest since July 2011.

The yield was 4.08%, down from 4.20% Friday. A narrower spread indicates greater investor confidence in the Italian economy and Rome's ability to pay down its huge debt.

Analysts said investors were responding to a good bond sale and the prospect of political stability as Italy's left-right government embarks on reforms in the New Year, although pointers were seen as weak in thin holiday trading.

European markets posted minimal changes after a recent string of gains on optimism that the US economy is strong enough to withstand the gradual withdrawal of monetary stimulus.

The Milan bourse closed 0.06% up despite some turbulence among banking stocks, notably troubled Tuscan lender Monte dei Paschi di Siena (MPS) which seesawed after putting off a much-needed capital hike from January to May.

London was 0.29% down, Frankfurt 0.40% down, Paris 0.05% down, Madrid 0.02% up and Athens 0.62% down.