Italian bond yields hit weekly lows

LONDON, Aug 8 (RTRS): Italian bond yields hit this week’s lows on Wednesday before a government budget meeting and news conference in Rome that could provide further detail on how far Italy is willing to push the European Union’s rules on budgets.

Italian public spending is a key focus for investors, with the eurosceptic government’s high spending plans unnerving financial markets.

Economy Minister Giovanni Tria has moved to reassure markets on this, telling local news paper Il Sole 24 Ore that all reforms included in the government’s plans were “compatible” with Italy’s EU commitments on public finances.

But other senior government figures have placed caveats on those commitments.

“We are expecting a few more details on policy thoughts though the processes are not yet complete so it is hard for the market to come to a sound and conclusive judgement,” said DZ rates strategist Andy Cossor.

“...Whether (Italy is) ...pushing for more flexibility from Brussels remains to be seen.”

Italian bond yields fell early on Wednesday. The two-year bond hit lows of 0.79 percent before rising to 0.89 percent.

The yield on Italy’s five and 10year bonds were two basis points lower at 2.00 percent and 2.85 percent respectively. ,

Borrowing costs among other eurozone sovereigns were little changed with the yield on Germany’s 10-year government bond, the benchmark for the region, flat at 0.41 percent.