الرئيسية
By Valentina Za
MILAN (Reuters) - Italy's five-year
borrowing costs are expected to rise further above 6 percent on
Wednesday, to mark a new euro lifetime high, at an auction that will
provide a first test of bond market sentiment towards the euro zone
after last weekend's EU summit.
Measures agreed by European leaders
to strengthen fiscal discipline have not convinced markets the debt
crisis will be resolved and threatened rating downgrades for euro zone
states averted, or curbed yields on outstanding Italian debt.
Saddled with a debt equivalent to 120
percent of gross domestic product, Italy has seen its funding costs
spiral towards unsustainable levels since taking centre stage in the
debt crisis in early July.
The yield on the five-year BTP bond
it will sell on Wednesday topped 7 percent on Monday, although it was
able to sell short-dated debt on the same day at a slightly lower cost
than the euro-era high levels seen a month before.
Italy paid 6.3 percent in November to
sell five-year bonds, its highest cost of borrowing since the single
currency's adoption in 1999.
The same September 2016 BTP bond
yielded around 6.8 percent late on Tuesday as markets fretted over
implementation of measures on the euro zone bailout fund agreed at the
summit. Fears that credit rating agency Standard & Poor's will
downgrade some or all of the 15 euro zone sovereigns it has on watch
after the summit also kept investors edgy.
The small size of Wednesday's sale --
limited to just one issue of up to 3 billion euros -- should help it go
through despite low liquidity in the markets close to year-end. But
bigger tests loom in the new year.
BIG CHALLENGE IN JANUARY
Italy has trimmed the size of its
auctions in reaction to market pressure but it will have to step up
issuance if it is to meet a gross funding goal of around 440 billion
euros next year.
"The issuance challenge for Italy in
2012 is considerable and January will provide an important first
hurdle," Citi analysts said in a comment on Wednesday's auction.
Nearly 26 billion euros of BTP bonds mature on February 1, with 91 billion euros of bonds falling due by the end of April.
MILAN (Reuters) - Italy's five-year
borrowing costs are expected to rise further above 6 percent on
Wednesday, to mark a new euro lifetime high, at an auction that will
provide a first test of bond market sentiment towards the euro zone
after last weekend's EU summit.
Measures agreed by European leaders
to strengthen fiscal discipline have not convinced markets the debt
crisis will be resolved and threatened rating downgrades for euro zone
states averted, or curbed yields on outstanding Italian debt.
Saddled with a debt equivalent to 120
percent of gross domestic product, Italy has seen its funding costs
spiral towards unsustainable levels since taking centre stage in the
debt crisis in early July.
The yield on the five-year BTP bond
it will sell on Wednesday topped 7 percent on Monday, although it was
able to sell short-dated debt on the same day at a slightly lower cost
than the euro-era high levels seen a month before.
Italy paid 6.3 percent in November to
sell five-year bonds, its highest cost of borrowing since the single
currency's adoption in 1999.
The same September 2016 BTP bond
yielded around 6.8 percent late on Tuesday as markets fretted over
implementation of measures on the euro zone bailout fund agreed at the
summit. Fears that credit rating agency Standard & Poor's will
downgrade some or all of the 15 euro zone sovereigns it has on watch
after the summit also kept investors edgy.
The small size of Wednesday's sale --
limited to just one issue of up to 3 billion euros -- should help it go
through despite low liquidity in the markets close to year-end. But
bigger tests loom in the new year.
BIG CHALLENGE IN JANUARY
Italy has trimmed the size of its
auctions in reaction to market pressure but it will have to step up
issuance if it is to meet a gross funding goal of around 440 billion
euros next year.
"The issuance challenge for Italy in
2012 is considerable and January will provide an important first
hurdle," Citi analysts said in a comment on Wednesday's auction.
Nearly 26 billion euros of BTP bonds mature on February 1, with 91 billion euros of bonds falling due by the end of April.