Search ForexCrunch

Italy had a very successful bond auction: it paid an average yield of 4.92% for 10 year bonds. This is lower than the previous auction that saw 5.24% and the best since May 30th 2011, when the euro-zone’s third largest economy paid only 4.73%.

EUR/USD is on the rise within the range, but is limited by resistance.

Italy raised 3 billion euros in the 2022 BTP, paying an average yield of 4.92% and enjoying a bid to cover rate of 1.42, better than 1.33 seen in the previous auction. It also raised 5 year bonds (2017 BTP) for 3.80% in yield, down from 4.09% last time. Also here, the cover rate was better than last time.

This successful auction comes despite Berlusconi’s threats to topple Mario Monti’s government and despite the uncertainty around a Spanish bailout request – which could prevent an Italian one. It also comes despite worsening economic conditions in Europe and no result in negotiations with Greece.

EUR/USD is now trading at 1.2950, after trying to break above 1.2960 unsuccessfully. For more lines, see the EUR/USD forecast.