Italian Bonds Emerge as Europe’s Weak Spot on Carry Trade Unwind

Italy’s bonds have been hammered since the start of the Iran war, emerging as the weakest link in the euro area as investors unwind one of the market’s favorite trades.

The country’s yields surged twice as much as Germany’s on Friday. That drove up the spread between the two, a gauge of risk sentiment in the region, to 92 basis points, about 30 basis points wider from before the start of US-Israeli airstrikes on Iran.