Credit hikes boost Italian bonds – Reuters

LONDON, Dec. 6 (Reuters) – The yield on Italian 10-year bonds fell to its lowest level in two weeks on Monday, pushed lower by higher Fitch ratings.

Fitch Ratings upgraded Italy’s sovereign credit rating a notch to BBB on Friday evening, citing confidence in the economic outlook supported by the use of the European Union’s post-pandemic stimulus fund. Read more

This ensured a positive start to the week for Italian bonds, with prices rising and yields falling. The yield on Italian 10-year bonds fell around 2.5 basis points to around 0.90% – a two-week low.

“Construction in particular should see favorable winds from Fitch’s rating hike,” said Rainer Guntermann, rate strategist at Commerzbank.

Italian bonds, also known as BTP, have outperformed their eurozone counterparts, with broader markets generally subdued as investors continue to wait for more details on the new variant of the Omicron coronavirus and what it does. means for the global economic outlook and the policy of the European Central Bank.

The benchmark 10-year German Bund yield fell only one basis point in early trading, to around -0.39%. Most of the block’s other long-term bond yields were slightly lower that day.

The ECB could set its policy for a relatively short period at this month’s meeting, given the heightened uncertainty, but is not expected to delay a decision as markets need direction, the Reuters told Reuters on Friday. President of the ECB Christine Lagarde. Read more

Bond strategists were forecasting issuance in the eurozone at around € 10 billion this week, and would decline before the end of the year. Many of the bloc’s issuers are also expected to unveil their issuance plans for the coming year.

Reporting by Dhara Ranasinghe; Editing by Alex Richardson

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