Italian Auction: Investors Ignore Moody’s – 3 Year Yields

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Italy sold bonds for three years (BTP) and raised 3.5 billion. The yield fell from 5.30% to 4.65%. The bid to cover was 1.73.

Update: The bonds for 7 years, maturing in September 2019, saw a higher yield than last time:  5.58% vs 4.30% on March 14

This comes after Moody’s downgraded Italy by two notches, leaving it two notches above “junk” status.

10 year bond yields rose in the secondary markets prior to the auction, and crossed the 6% mark once again. They are falling down to 5.92% now.

In the last 10 year bond auction, Italy paid a dear price of 6.19% in the yield. Spain, which suffers from higher bond yields in the secondary markets, recently paid even more: a yield of 6.43%.

EUR/USD traded around 1.22 prior to the release. It recovered from the lows of 1.2167 that it fell to yesterday, but didn’t get too far. It is still too close to the critical line of 1.2150, which was a clear separator in the past.

Euro/dollar rose and almost touched 1.220 after the announcement, but retreated afterwards.

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Yohay Elam – Founder, Writer and Editor I have been into forex trading for over 5 years, and I share the experience that I have and the knowledge that I’ve accumulated. After taking a short course about forex. Like many forex traders, I’ve earned the significant share of my knowledge the hard way. Macroeconomics, the impact of news on the ever-moving currency markets and trading psychology have always fascinated me. Before founding Forex Crunch, I’ve worked as a programmer in various hi-tech companies. I have a B. Sc. in Computer Science from Ben Gurion University. Given this background, forex software has a relatively bigger share in the posts.

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