Italian bond yields just dipped below two per cent for the first time ever

 
Emma Haslett
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Italy's services PMI surprised investors today, after it sank into its third recession in six years in August (Source: Getty)

Yields on Italian 10-year bonds have fell to 1.997 per cent this morning, the first time they've ever dropped below two per cent.

The fall suggests investor confidence in the country - which in August fell into its third recession since 2008 - is beginning to strengthen.

The drop came on the back of figures showing the country's services sector is beginning to show stronger growth. Markit's services purchasing managers' index (PMI) for November showed 51.8, up from 50.8 in October and way above the 50 mark which denotes a contraction.

However, the Eurozone as a whole fared less well: its services PMI slid to 51.1 in November, from 52.3 in October.

Investors have also been encouraged by a pledge from the Italian treasury to buy back government debts due to mature between next year and 2017, and floating-rate notes maturing in September next year and July 2016.

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