Milan neutral on Tuesday while Madrid reports sharp rise

Italian, German bond spread edges higher to 282 basis points

Milan neutral on Tuesday while Madrid reports sharp rise

Milan, July 23 - Milan's main financial market was basically unchanged Tuesday while Madrid's key exchange reported a sharp rise. The FTSE-Mib rose by just 0.03% to close at 16,238 points as weak financial data from the United States weighed on many investors. Surprisingly weak regional manufacturing data from the Richmond Federal Reserve raised questions about the strength of the recovery in the mighty US economy. The outlier on Tuesday was Madrid where investors were heartened by reports from the country's central bank showing the Spanish economy likely contracted by just 0.1% in the second quarter compared with the first three months of year. That suggests the country may be on its way out of recession. That also helped to hold down Italian bond yields. The spread between Italy's 10-year bond and its German counterpart was little changed, closing at 282 basis points, up slightly from the 280 basis points reported one day earlier. The yield on Italian 10-year paper closed at 4.36%., up slightly from Monday's closing yield of 4.3%. The spread between lending rates in the two countries is seen as an indication of investor faith in the Italian economy and its ability to cope with a lingering recession. On other European markets, Frankfurt's DAX shed 0.20% on the day, closing at 8,314.23 points, Paris's CAC 40 gained 0.37%, closing at 3,939.92 points, Spain's IBEX 35 jumped by 1.35% to close at 8,073.70 points, and London's FTSE 100 slipped by 0.39% to end trading at 6,597.44.

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