Italian three-year borrowing costs are expected to retreat below five per cent at a bond auction on Friday as progress on a Spanish bank bailout brings some respite in euro zone market tensions that analysts say could nevertheless easily flare up again.
Italy last sold three-year bonds a month ago, right before pivotal elections in Greece and soon after a sketchy accord to support Spanish banks that had failed to reassure investors. It paid an average 5.3 per cent yield then, the highest since December.
On Friday, the Treasury offers up to 5.25 billion euros (US$6.41 billion) in bonds, including a new three-year issue carrying a 4.5 per cent coupon. It will also sell new tranches of three bonds due in 2019, 2022 and 2023 that are no longer issued on a regular basis.
The new bond traded at around 4.8 per cent late on Thursday, pointing to a likely fall in the cost of borrowing.
Italy last sold three-year bonds a month ago, right before pivotal elections in Greece and soon after a sketchy accord to support Spanish banks that had failed to reassure investors. It paid an average 5.3 per cent yield then, the highest since December.
On Friday, the Treasury offers up to 5.25 billion euros (US$6.41 billion) in bonds, including a new three-year issue carrying a 4.5 per cent coupon. It will also sell new tranches of three bonds due in 2019, 2022 and 2023 that are no longer issued on a regular basis.
The new bond traded at around 4.8 per cent late on Thursday, pointing to a likely fall in the cost of borrowing.