Irish, Italian and Spanish 10Y mid-yields hit 8Y lows

 Mid-yields for Italian and Spanish ten-year bonds hit eight-year lows in February, according to data on Tradeweb’s European government bond marketplace, following Ireland’s example back in January. 

Irish ten-year yields dropped to 3.2% at yesterday’s market close, on a par with 2005 levels. Ireland, often described as the poster child of Eurozone recovery, had its Fitch “BBB+” rating re-affirmed today. The credit rating agency stated it does not anticipate a further recapitalisation of the country's financial sector, and has left its stable outlook unchanged. Last month, Moody’s upgraded Irish debt to investment grade with a positive outlook from its previous junk status. 

This afternoon, Italy’s Matteo Renzi is expected to unveil his new cabinet and formally accept the mandate to become prime minister. Mr. Renzi, who engineered the ousting of ex-Premier Enrico Letta last week, has promised a program of fast political and financial reforms to tackle the country’s economic challenges, such as high unemployment and public debt. Italian ten-year yields closed below 3.6% earlier this week, a value last reached in January 2006. 

 Italy 10Y MY chart_210214 

Spain’s unemployment rate at 26% is only second to the one in Greece, but its 0.3% GDP growth in Q4 2013 follows a growth figure of 0.1% in Q3, which signalled the country’s exit from recession. On February 18, Spanish ten-year yields fell to their lowest level (3.5%) since February 24 2006 at market close. 

 Spain 10Y MY_210214 

Data Source: Tradeweb