Italy 10-year bond yields are up by about 12 bps to start the day
10-year yields in Italy are up to 1.73% currently as confidence has fallen dramatically amid the failure by euro area finance ministers to reach a coordinated response to combat the economic fallout from the virus outbreak.
The ECB bazooka last month helped to calm things, so even the first failed attempt on 26 March didn't raise too much eyebrows but the latest one is one that the market doesn't seem to be ignoring - considering the economic carnage over the last few weeks.
Today's failure outlines the battle between the North and the South of the continent, as they are split over the sharing of the burden for countries hit hard by the virus outbreak.
Italy and Spain are pleading for a solidarity fund that would be paid for jointly i.e. coronabonds but this idea is largely resisted by Germany and Netherlands.
Nonetheless, the worry for the euro and ECB now is that we will start to see the yields spread widen again between Bunds and BTPs. It is already hitting 213 bps currently:
