Italian bond yields drop after a successful debt auction on Monday, helping give some support to the euro that has been falling ahead of a key EU Summit in Brussels later today.
The Italian Treasury was able to sell sold 7.48 billion euros of 10-year bonds, helping lower borrowing costs to 6.08 percent from a near 7 percent level a month ago.
Italy sold 3.57 billion euros of a new five-year BTP bond maturing in May 2017 at an average 5.39 percent rate, down from a euro lifetime high of 6.5 percent at the previous mid-December sale.
Rome also sold two off-the-run bonds due in 2016 and 2021.
The bond results were important test for Italy to see if I can still raise funds in the debt markets after Fitch Ratings downgraded Italy’s long-term debt rating by two notches to ‘A-‘ late on Friday.
Italy has been able to show today that demand for its longer-dated issues is still strong, as the bid-to-cover ratio was reasonably strong.