The Italian bonds slumped on Tuesday as investors cooled on safe-haven assets amid gains in riskier assets including stocks and oil and optimistic speech from Italy's finance minister Padoan. Also, an unexpected Italian bond sale pushed bond prices further down. The yield on the benchmark 10-year Treasury note, which moves inversely to its price, moved rose 2.34 pct to 1.386 pct and the yield on the 3-year Treasury bond climbed 28.50 pct to 0.051 pct by 0755 GMT.
Italy's finance minister Padoan said that the employment figures are rising this year and budget policy benefitting Italian growth which accelerated in Q1. Said deviation on deficit goal this year not significant and Italy can easily meet budget middle term objective, deep adjustment on budget would harm economic growth. Said debt to GDP cut is a key to keep credibility and more investments needed to make economic recovery sustainable. He further added that emerging economies slowing down and there are also signs of economic slowdown in Europe.
The Italian bonds have been closely following developments in oil markets because of their impact on inflation expectations. Crude oil prices rose as Kuwait reported on Sunday that its crude production fell to 1.1 million barrel per day, from up 2.8 million barrel in March as workers went on stick. The International benchmark Brent futures rose 1.10 pct to $43.35 and West Texas Intermediate (WTI) climbed 0.73 pct to $40.07 by 0845 GMT.
Lastly, the investors will now focus on the ECB governing council meeting on Thursday, which is expected to culminate in the decision to leave policy unchanged.
Meanwhile, the Italy-40 index rose 1.03 pct and the FTSE MIB, also climbed 1 pct. The FTSE IT Mid Cap Index is up 0.30 pct, the TR Italy-50 trading 0.93 pct higher by 0836 GMT.
The material has been provided by InstaForex Company – www.instaforex.com