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Spread closes on 225

Still lowest since July 2011

27 December, 19:31
Spread closes on 225 (ANSA) - Rome, December 27 - The spread between Italian 10-year bonds and their AAA-rated German equivalents, the premium investors pay to hold Italian paper, on Thursday closed two points down on its pre-Christmas mark of 227 points, at 225 with a 4.20% yield, still around its lowest since July 2011.

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 post-holiday trading.

Markets posted the latest in a two-week series of gains across Europe as the Dow Jones hit new heights amid optimism that the US economy is strong enough to withstand the gradual withdrawal of monetary stimulus.

The Milan bourse closed 1.39% up despite some turbulence around banking stocks, notably troubled Tuscan lender Monte dei Paschi di Siena (MPS) which postponed a key meeting.

London was 0.85% up, Frankfurt 1.06% up, Paris 1.40%, Madrid 0.82% and Athens 4.78% up.