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Yield on Italian 10-year bonds drops to 2006 low

Markets optimistic about a Renzi premiership

17 February, 13:31
Yield on Italian 10-year bonds drops to 2006 low (see related) (ANSA) - Rome, February 17 - The yield on 10-year Italian bonds fell to 3.60% on Monday, its lowest since January 24, 2006. The spread between 10-year Italian bonds and the ultra-safe German bund narrowed to 191 points in mid-trading. Both figures indicate renewed investor confidence in Italy's ability to rebound from its worst postwar recession.

Markets have been optimistic since Matteo Renzi, head of the center-left Democratic Party (PD), became the likely successor to outgoing Premier Enrico Letta, whose own party voted to oust him Thursday amid disappointment for not moving swiftly enough to enact political and economic reforms. The Milan bourse rose to its highest level since July 2011 Friday on the prospect of business-friendly Renzi becoming Italy's new premier.

After receiving a government-formation mandate on Monday, Renzi vowed to complete electoral reforms by the end of February, followed "immediately afterward by labor reforms in March, public-administration reforms in April and fiscal (reforms) in May".