Italy raised the targeted maximum amount at a debt auction on Thursday, but the yield on its three-year bond surged as investors remained worried that the country may be the next to seek a bailout after a EUR 100 billion rescue of Spanish banks failed to calm concerns.
Elsewhere, Spain's benchmark 10-year bond yield hit a euro-era record high 7 percent after Moody's downgraded the country's credit rating to just above junk yesterday. Cyprus, which is also rumored to be in need of a bailout, was also downgraded.
The Italian treasury sold a total EUR 4.5 billion of its longer-term debt, including a three-year bond or BTPs. The agency was aiming proceeds between EUR 2.75 billion and EUR 4.5 billion.
The yield on the 2.50 percent March 2015 bond climbed to 5.3 percent from 3.91 percent in the previous sale on May 14. Analysts had widely expected the yield to come in above 5 percent.
Demand, however, improved slightly. The bid-to-cover ratio rose to 1.59 from 1.52.
The country paid a yield of 6.1 percent for its 4.25 percent February 2019 off-the-run BTP and 6.13 percent for its 4.25 percent March 2020 debt.
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June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.