Italian bond spread yo-yos in early trading

Yields rose Monday amid concerns of political uncertainty

Italian bond spread yo-yos in early trading

Rome, February 5 - The spread between the 10-year Italian bond and the German benchmark yo-yoed in early trading on Tuesday after climbing sharply Monday amid market concern about possible political uncertainty following this month's elections. The yield spread, a key measure of Italy's borrowing costs and of investor confidence in the country, shot up by over 20 points to close at 285 on Monday. Many analysts said the recent rise in the polls of Silvio Berlusconi's centre-right coalition has spooked the markets after the ex-premier said at the weekend he wanted to scrap the new property IMU tax introduced by the emergency technocrat government of outgoing Premier Mario Monti. Berlusconi also said taxpayers would be refunded the IMU they paid last year if the centre right wins the February 24-25 election. According to some polls, the centre right has pulled within 4% of Pier Luigi Bersani's centre-left coalition. After the opening of trading on Tuesday the spread climbed to 293 points, but then it eased back to 287 with a yield of 4.48%.

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