Economics
Italy's Wondrous Bonds Cover Up Budget Challenges Ahead
- Prospect of ECB stimulus is pushing euro-area yields lower
- Market moves could entice Italy to push expansive budget plan
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Looking at Italy’s debt market, you’d be forgiven for thinking that the embattled nation’s problems were firmly behind it.
Bonds had their best week in more than six years, and yields are at their lowest since 2016, prompting the government to lock in bargains by issuing 50-year debt on Tuesday. The driver isn’t budget prudence, but the prospect of the European Central Bank restarting quantitative easing, providing a guaranteed buyer of Italian debt.