Investing.com - Italy saw borrowing costs drop sharply at an auction of three- and five-year government bonds on Thursday, as Italian government financing costs continue to move lower since European Central Bank President Mario Draghi announced a new ECB government bond buying plan last week.
Italy’s Treasury sold EUR4 billion worth of three-year government bonds at an average yield of 2.75% earlier in the day, down from 4.65% at a similar auction last month.
Demand was decent, with bids exceeding supply 1.49 times, compared to a “bid-to-cover” ratio of 1.73 last month.
Italy sold an additional EUR1.5 billion of five-year debt at an average yield of 3.71%, down sharply from 4.73% at a similar auction last month. The “bid-to-cover” ratio was 1.85, up from 1.46 at a similar auction in August.
The country also sold EUR1.5 billion of 14-year debt maturing in 2026 at an average yield of 5.32%, compared to a yield of 5.90% at a similar auction last month.
The yield on Italian 10-year bonds stood at 5.05% following the auction.
Meanwhile, the euro held on to gains against the U.S. dollar, with EUR/USD adding 0.16% to trade at 1.2919.
European stock markets remained lower. Italy FTSE MIB Index fell 0.65%, the EURO STOXX 50 dropped 0.5%, France’s CAC 40 declined 0.6%, Germany's DAX slumped 0.4%, while London’s FTSE 100 retreated 0.1%.
Italy’s Treasury sold EUR4 billion worth of three-year government bonds at an average yield of 2.75% earlier in the day, down from 4.65% at a similar auction last month.
Demand was decent, with bids exceeding supply 1.49 times, compared to a “bid-to-cover” ratio of 1.73 last month.
Italy sold an additional EUR1.5 billion of five-year debt at an average yield of 3.71%, down sharply from 4.73% at a similar auction last month. The “bid-to-cover” ratio was 1.85, up from 1.46 at a similar auction in August.
The country also sold EUR1.5 billion of 14-year debt maturing in 2026 at an average yield of 5.32%, compared to a yield of 5.90% at a similar auction last month.
The yield on Italian 10-year bonds stood at 5.05% following the auction.
Meanwhile, the euro held on to gains against the U.S. dollar, with EUR/USD adding 0.16% to trade at 1.2919.
European stock markets remained lower. Italy FTSE MIB Index fell 0.65%, the EURO STOXX 50 dropped 0.5%, France’s CAC 40 declined 0.6%, Germany's DAX slumped 0.4%, while London’s FTSE 100 retreated 0.1%.