Italy’s Bond Investors Rocked by Prospect of Fresh Elections
- BofA sees early vote triggering a rapid rise in spread levels
- ECB has helped to drive down yields during the pandemic
The Palazzo Chigi, the headquarters of the Italian government, in Rome.
Photographer: Alessia Pierdomenico/BloombergThis article is for subscribers only.
Italian political concerns are bubbling to the surface for bond investors with a growing risk of fresh elections in the summer threatening to compound the economic uncertainty wrought by the coronavirus crisis.
The nation’s bonds slid Thursday following a report by the country’s ANSA newswire that the Democratic Party, part of the ruling coalition, sees a risk of fresh elections in June. Bank of America Corp. says that could widen the country’s 10-year yield spread over Germany -- a key gauge of risk -- to 140 basis points, the highest since November.