Italy sold €9bn of six-month bills at an average 2.96 per cent yield, up from 2.10 per cent it paid only a month ago. The Treasury faces a tougher market test today when it offers up to €5.5bn in five- and 10-year debt.
On Tuesday, Spain paid 3.24 per cent to sell six-month bills. Madrid is seen at risk of having to ask for more aid after formally requesting a European rescue for its banks this week. But doubts are also growing on Italy’s ability to keep funding its €1.95 trillion debt, which makes it the world’s fourth-largest sovereign debtor.
Yesterday’s sale was covered 1.6 times, in line with a month ago, with demand helped by €9.9bn of maturing bills. Domestic appetite has so far allowed the Treasury to complete 56 per cent of its €445bn annual funding plan.
With its benchmark 10-year yields above six per cent, Italy is calling for the Eurozone’s rescue funds to be used to ease pressure on its bonds.