Italian bond yields slide to three-month low

Business | 22 Jul 2021 4:28 pm

Italian borrowing costs sunk to their lowest in over three months on Thursday ahead of a European Central Bank meeting where its chief Christine Lagarde is expected to elaborate on a new target widely perceived as having dovish implications, Reuters reports.

The ECB will meet for the first time since it unveiled a tweaked inflation target earlier this month and is all but certain to promise an even longer period of stimulus to make good on its commitment to boost inflation.

Lower-rated eurozone bond yields were broadly lower in morning trade as investors positioned for that

"The July meeting was never expected to matter much, but following the strategy review could turn out to be a decisive milestone," analysts at RBC said in a note.

They said they expected policymakers would use this opportunity to steer markets towards an even longer period of low rates than currently priced in.

Italy's 10-year bond yield dropped two basis points to 0.6708 percent, the lowest since early April, and other southern European benchmark bond yields were also down 1-2 basis points on the day.

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