Italy’s 10-year bond yields are just shy of 7%, a sign the market is worried about the long term budget cuts which are meant to slow the increase of Italy’s national debt. The news has also caused more flow into dollars and dropped the euro to near $1.30, an eleven month low.
Italy sold another round of government bonds Thursday, with yields falling for 2014 and 2022 debt, news reports said. Italy raised a total of around 7 billion euros ($9 billion) of various bonds. The government had planned to raise between 5 billion and 8.5 billion euros. Italy paid a yield of 5.62% to sell new three-year debt, down sharply from 7.89% in an auction last month, Reuters reported, while 10-year bonds were sold at a yield of 6.98%, down from 7.56% in a late November auction.