Italian-Spanish spread narrows to one point

Italian bonds under pressure over concerns govt could collapse

Italian-Spanish spread narrows to one point

Rome, September 9 - The difference in the spread levels of the 10-year bonds of Italy and Spain fell to just one basis point in early trading on Monday. Italy's spread was consistently significantly lower than Spain's during the peaks in the eurozone debt crisis in 2011 and 2012, even when Italy's bonds were under extreme pressure, as Spain's financial plight was considered worse than Italy's. But the gap has narrowed in recent months after the crisis was apparently brought under control and it is now close to parity, as the Italian 10-year BTP had been hit by uncertainty over the future of Premier Enrico Letta's left-right government. In early trading Monday, the 10-year BTP's spread with the benchmark German bund stood at 254 points, while the Spanish bond's spread with the bund was 255. The spread is a key measure of a country's borrowing costs and of investor confidence.

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