Is The Next European Country To Fall Italy…. As Debt Costs Approach The Red Zone

Posted By on December 29, 2010

Italy’s borrowing costs have surged back to financial crisis levels and the country is now looking like a proper member of the eurozone’s fringe, according to Ambrose Evans-Pritchard.
The yield on Italy’s 10-year bond is now at 4.86% and, combined with weakening monetary supply data, Italy now looks destined for a downturn similar to the rest of the fringe in the next 9 months.

From The Telegraph:

Neil Mellor, currency strategist at the Bank of New York Mellon, said big institutional investors have been pulling funds out of Italy and rotating into German debt on a large scale. “Our flow data shows that the trend has been just as concerted out of Italian debt as it has been out of Irish or Greek debt. Italy should be able to weather 2011 in good shape but the government’s debt dynamics are very poor,” he said.

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