Italy held a bond auction today on its long term government bonds, just as euro zone finance officials are beginning the Ecofin summit in Brussels to discuss how to tackle the region’s debt crisis.
Rome was able to sell almost all of the bonds targeted. The amount sold was close to the upper end of its target, which helped ease nerves among investors who had been worried by the prospect of limited demand since Italian bond yields have been rising recently to above the key 7% level.
This helped boost the euro, which surged after the results of the bond sale. Italy is the third latest economy in Europe so it is important for the country to be able to continue to raise funds in the debt markets.
Rome sold 7.5 billion euros worth of bonds at a high cost of 7.56%, which is a euro-era high for the 10-year bond and 7.89 on the 3-year bond.
The actual average yield levels were all lower than market levels which gave markets a relief and helped support the euro, which jumped against the dollar after the auction to 1.3440 against the dollar.