Italy’s bond yields rise on political uncertainty; Powell eyed

Author of the article: MILAN — Italy’s government bonds underperformed their euro zone peers on Tuesday on growing political uncertainty as markets remained focused on the path of U.S. monetary policy normalization and surging inflation. The Italian Parliament will convene to choose a new president this month with Premier Mario Draghi seen as the leading…
Italy’s bond yields rise on political uncertainty; Powell eyed

Author of the article:

MILAN — Italy’s government bonds underperformed their euro zone peers on Tuesday on growing political uncertainty as markets remained focused on the path of U.S. monetary policy normalization and surging inflation.

The Italian Parliament will convene to choose a new president this month with Premier Mario Draghi seen as the leading candidate.

Investors fretted about the country’s political stability should the former European Central Bank chief leave his job as prime minister and assume the presidency.

By 0830 GMT, Italy’s 10-year bond yield was up almost 4 basis points at 1.39%, its highest level since June 2020. .

“Uncertainty over the Italian Presidential election as well as its implications for government stability and the reform agenda is rising,” wrote Carlo Capuano, Vice President, Global Sovereign Ratings at DBRS Morningstar.

More generally, investors’ bets that the Federal Reserve could lift interest rates as early as March ignited a robust sell-off on bond markets in the last few weeks before a key U.S. December inflation reading due on Wednesday.

A Reuters poll predicts consumer prices rose 7% year-on-year.

In comments prepared for delivery at a congressional hearing later in the day, Fed Chair Jerome Powell pledged “to prevent higher inflation from becoming entrenched.”

Some of Wall Street’s biggest banks now expect four U.S. interest increases this year starting in March, a more aggressive call than a week ago.

“U.S. rates should once again set the tone in global fixed income markets. Powell’s hearing will be an opportunity to gauge the aggressiveness of the Fed’s tightening cycle, and it could see the curve front-load hikes further,” ING strategists wrote in a note to clients.

Germany’s 10-year note yield ticked up at -0.032% having risen on Monday as far as -0.025%, its highest level since May 2019, and not far from positive territory.

Elsewhere, Switzerland’s 10-year bond yield held in positive territory after rising above 0% last week for the first time since late October.

On the other side of the Atlantic as well, investors focused on the outlook for euro zone inflation after the December reading unexpectedly rose to a record high of 5% before a speech by European Central Bank President Christine Lagarde.

In an interview with Italian daily Il Sole 24 Ore, the European Central Bank’s chief economist Philip Lane said on Tuesday the ECB does not see euro zone inflation above its 2% target in the medium term.

Furthermore, Spain kicked off on Tuesday the sale of a new 10-year bond via syndication with a size in the 8-10 billion euros ($90.69 billion) range, according to Mizuho strategists. ($1 = 0.8821 euros) (Reporting by Sara Rossi; editing by Saikat Chatterjee and Ed Osmond)

Financial Post Top Stories

Sign up to receive the daily top stories from the Financial Post, a division of Postmedia Network Inc.

By clicking on the sign up button you consent to receive the above newsletter from Postmedia Network Inc. You may unsubscribe any time by clicking on the unsubscribe link at the bottom of our emails. Postmedia Network Inc. | 365 Bloor Street East, Toronto, Ontario, M4W 3L4 | 416-383-2300

Read More

Total
0
Shares
Leave a Reply

Your email address will not be published.

Related Posts
New Zealand counts cost of Auckland floods, more rain forecast
Read More

New Zealand counts cost of Auckland floods, more rain forecast

WELLINGTON — Flood-ravaged Auckland is forecast to receive further heavy rain in the coming days, authorities in New Zealand’s largest city said on Monday, as insurers counted the costs of what looks likely to be the country’s most expensive weather event ever. Four people lost their lives in flash floods and landslides that hit Auckland…
Farmers Edge Inc. Announces Departure of Board Member Lawrence Zucker
Read More

Farmers Edge Inc. Announces Departure of Board Member Lawrence Zucker

Author of the article: WINNIPEG, Manitoba — Farmers Edge Inc. (“Farmers Edge” or the “Company”) (TSX: FDGE), a pure-play digital agriculture company, today announced the resignation of Lawrence Zucker as a member of the Board of Directors. “The Board of Directors would like to thank Mr. Zucker for his contributions to the Company since he…
FAA clears Boeing to resume delivery of 787 Dreamliners
Read More

FAA clears Boeing to resume delivery of 787 Dreamliners

Author of the article: The Associated Press David Koenig Boeing has cleared a key hurdle with federal regulators and could soon resume deliveries of its large 787 airliner, which has been plagued by a series of production issues since late 2020, a person familiar with the matter said Saturday. The Federal Aviation Administration notified Boeing…
VSBLTY SIGNS AGREEMENT TO LAUNCH GOLDEN RECORD INSTALLATIONS IN LATIN AMERICAN CONVENIENCE STORES
Read More

VSBLTY SIGNS AGREEMENT TO LAUNCH GOLDEN RECORD INSTALLATIONS IN LATIN AMERICAN CONVENIENCE STORES

Author of the article: Philadelphia, PA, May 03, 2022 (GLOBE NEWSWIRE) — VSBLTY Groupe Technologies Corp. (OTCQB: VSBGF) (CSE: VSBY) (Frankfurt 5VS) (“VSBLTY”), a leading software provider of security and retail analytics technology, today announced it has signed a monthly SaaS agreement with Winkel Media to begin a phase one installation of Golden Record in…