Italy 1-yr debt costs jump at 11 bln euro auction
MILAN, April 11
MILAN, April 11 (Reuters) - Italy's one-year borrowing costs rose for the first time since November at a sale of short-term bills on Wednesday, mirroring fresh doubts about weaker euro zone countries and highlighting market nerves ahead of a major auction of three-year bonds on Thursday.
Rome paid 2.84 percent to sell one-year debt, up from 1.405 percent at the previous auction in mid-March as Spain's budget troubles fuelled worries about the position of other heavily indebted European economies, including Italy.
Steady domestic demand helped the Treasury raise the planned 11 billion euros in 12- and three-month bills, with bids totalling 1.6 times the amount on offer, in line with a month ago.
The average three-month auction rate more than doubled to 1.249 percent from 0.492 percent a month ago. The Treasury issues these ultra-short maturities depending on its cash needs.
Italy's one-year borrowing costs had been declining since mid-November when they hit a euro lifetime record of 6 percent at the height of the crisis when the very existence of the single currency appeared in doubt.
Last month they touched their lowest level since August 2010 at auction as massive injections of emergency funding into banks by the European Central Bank early in the year pushed Italian yields on secondary markets lower.
Wednesday's 12-month auction yield was the highest since mid-December.
The Treasury returns to the market on Thursday offering up to 5 billion euros of bonds, including its three-year benchmark and three off-the-run issues.
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