Italy 10-year yields are holding above 2.40%
And the rise in yields today saw the yield spread between Italy and Germany 10-year bonds surpass 200 bps or 2% for the first time in nearly a year. Meanwhile, the spread between Italy and Spain 10-year bonds is now over 100 bps or 1% for the first time in over six years.
And that has seen the FTSE MIB reverse all gains to turn negative on the day now. Italian banks will surely be worried as they may have to face mark-to-market losses due to their holdings in BTPs.
Morgan Stanley highlighted yesterday that 2.40% is the key threshold for them. And the continued exit out of Italian assets is what is still helping to keep the swissie bid on the day.
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