Italian Debt Yields Continue to Fall

Italy sold €5 billion in new 3-year bonds this morning at a yield of 2.76%, down dramatically from a 3.41% yield on a sale of similar bonds last month. The government also sold €1 billion in 7-year bonds at a yield of 4.3%.

Since late November, yields on Italy’s benchmark 10-year bonds have fallen from a high of 7.26% to 4.84%. There is some hope that the yields on Italian bonds will close to within 100 basis points of German 10-year bonds by the end of this year. The 10-year German bond yield today is 1.9%.