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Daily Digit: Italy's debt auction relief

Wednesday, December 12, 2012 - 01:10

Dec. 12 - Italy lowers its borrowing costs at a one-year debt auction, clearing its first market hurdle since Prime Minister Mario Monti announced his intention to leave office early. Ciara Sutton reports.

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6.5 billion euros - that's today's daily digit in Europe - the amount of one-year bills sold at Rome's debt auction. Yields fell to their lowest in nine months thanks to hefty redemptions boosting liquidity on the market. There were sighs of relief afterwards as it was the first auction since Prime Minister Mario Monti announced his intention to leave office early. But investors remain nervous about political uncertainty. Barclays Wealth's Will Hobbs. (SOUNDBITE) (English) VP RESEARCH, ECONOMICS & STRATEGY AT BARCLAYS WEALTH, WILL HOBBS, SAYING: "Actually what we've seen this morning so far is that bond yields have been cooling off again a little, and I think the bond market is looking at Italy but they're seeing over Italy's left shoulder the hulking presence of the ECB's balance sheet and that's probably enough deterrent for the moment." Monti says he will quit as soon as the 2013 budget law is approved. The early exit sparked concerns that Italy may stray away from economic reforms, particularly if former PM Silvio Berlusconi is re-elected. But some see the ECB bond-buying scheme as an effective counterweight, and expect Rome to meet its borrowing target for the year when it holds a final bond auction on Thursday.

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Daily Digit: Italy's debt auction relief

Wednesday, December 12, 2012 - 01:10