Italy is one of the PIIGS, and therefore one of the big troubled spots for investors to keep their eyes on. The good news is that if the hangman is still lurking, it seems that no one can see him anywhere. A Monday bond auction in Italy took five-year and 10-year sovereign borrowing costs down to the lowest reading since late in 2010.
A new government coalition in Italy and hopes of a European Central Bank rate cut later this week were two of the driving forces. Italy raised some 6 billion euros in 2018 and 2023 maturities. After looking closer at the results, this came to a yield of 2.84% for the five-year 3.50% coupon and a yield of 3.94% for the 10-year 4.50% coupon.
Another driving force behind the demand and solid pricing of the bonds is that Italy’s sovereign credit rating was affirmed by Moody’s at Baa2 late last week. Some even feel that investors will continue to move into European debt out of Japanese government bonds as the Bank of Japan is buying up assets.
The reaction in the Italian ETF and ADRs is signaling favorable gains as well. The iShares MSCI Italy Capped Index (NYSEMKT: EWI) is up a sharp 2.5% at $13.19 on the day, and the ADRs for Telecom Italia SpA (NYSE: TI) are up 4.6% at $8.40 on the day in New York trading. Even the ADR of oil and gas giant Eni SpA (NYSE: E) is up 1.7% at $47.62 so far in New York trading.
The Average American Is Losing Momentum On Their Savings Every Day (Sponsor)
If you’re like many Americans and keep your money ‘safe’ in a checking or savings account, think again. The average yield on a savings account is a paltry .4%1 today. Checking accounts are even worse.
But there is good news. To win qualified customers, some accounts are paying more than 7x the national average. That’s an incredible way to keep your money safe and earn more at the same time. Our top pick for high yield savings accounts includes other benefits as well. You can earn a $200 bonus and up to 7X the national average with qualifying deposits. Terms apply. Member, FDIC.
Click here to see how much more you could be earning on your savings today. It takes just a few minutes to open an account to make your money work for you.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.
Latest from 24/7
Our expert who first called NVIDIA in 2009 is predicting 2025 will see a historic AI breakthrough.
You can follow him investing $500,000 of his own money on our top AI stocks for free.