Italy-German 10-year spread drops below 250 bps

German yields are higher today but most of the move comes from Italian 10-year yields down 7 bps today to 4.09%.

A long way from 6.50% in July.

Spanish 10s have also broken below 5% today from 7.50% in July.

The improvement in periphery borrowing costs is by far the #1 reason to be long euros in 2013.

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