Investing.com - Italy saw borrowing costs surge to the highest level since December at an auction of 12-month government bonds on Wednesday, amid growing fears the country will be the next euro zone member to require a bailout.
Italy’s Treasury sold the full targeted amount of EUR6.5 billion worth of 12-month government bonds maturing in June 2012 at an average yield of 3.972% earlier in the day, the highest since December and up sharply from 2.340% at a similar auction last month.
Demand weakened slightly, with bids exceeding supply 1.73 times versus a "bid-to-cover" ratio of 1.79 in April.
The yield on Italian 10-year bonds eased to 6.10% following the auction, down from 6.22% hit Tuesday.
Bond auctions have become key drivers of risk sentiment in recent months, as traders attempt to gauge the ability of indebted euro zone nations to fund themselves.
Meanwhile, the euro held on to gains against the U.S. dollar, with EUR/USD rising 0.19% to trade at 1.2528.
European stock markets remained mixed in choppy trade. Italy FTSE MIB Index fell 0.55%, the EURO STOXX 50 added 0.2%, France’s CAC 40 declined 0.3%, Germany's DAX dipped 0.1%, while London’s FTSE 100 was flat.
Italy’s Treasury sold the full targeted amount of EUR6.5 billion worth of 12-month government bonds maturing in June 2012 at an average yield of 3.972% earlier in the day, the highest since December and up sharply from 2.340% at a similar auction last month.
Demand weakened slightly, with bids exceeding supply 1.73 times versus a "bid-to-cover" ratio of 1.79 in April.
The yield on Italian 10-year bonds eased to 6.10% following the auction, down from 6.22% hit Tuesday.
Bond auctions have become key drivers of risk sentiment in recent months, as traders attempt to gauge the ability of indebted euro zone nations to fund themselves.
Meanwhile, the euro held on to gains against the U.S. dollar, with EUR/USD rising 0.19% to trade at 1.2528.
European stock markets remained mixed in choppy trade. Italy FTSE MIB Index fell 0.55%, the EURO STOXX 50 added 0.2%, France’s CAC 40 declined 0.3%, Germany's DAX dipped 0.1%, while London’s FTSE 100 was flat.