Italy Bond Auction Goes Sour

More bad news this morning with the next in a string of highly mediocre bond auctions.

Italy sold $5.3 million worth of five- to nine-year bonds, paying a premium at yields of 5.60% and selling fewer bonds than targeted.

Demand stood at 1.28x the number of bonds offered, as opposed to a similar auction that drew 1.93x demand on July 14.

That sent yields on Italian 2-year government bonds spiking up to 4.81 per cent shortly after, before calming down ahead of news about an announcement to be made by French President Nicolas Sarkozy and German Chancellor Angela Merkel today.

 

Photo: Bloomberg

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