Les taux Italiens s'envolent !

The restaurants are full, the planes are fully booked and the hotel resorts are fully booked as well.

– Silvio Berlusconi

Version FR

Source: FT Alphaville


While in the bond market…

At the other end of the curve, Italy would now pay 5.7 per cent to borrow for twelve months. Two-year yield has breached 6 per cent (jumping some 41 bps this morning). Thirty-year bond yields (where the ECB has never intervened) have vaulted to 7 per cent.
No sign of the central bank so far.
Update (0845 UK time) – Also, just a bit on additional margin for Italian bonds at clearinghouses…
There’s been some focus on the 450bps spread “trigger” for margin on sovereign risk, applied to trades going through RepoClear at LCH Clearnet Ltd. It’s important to reiterate that this isn’t the spread of Italian debt to Bunds (which is already far north of 450bps) but to a specific benchmark index of French, German and Dutch debt. This spread remains at 419bps.
Even then, that’s LCH Clearnet Ltd. LCH Clearnet SA is directly connected to the domestic Italian bond market by contrast so it’s difficult to generalise about how fresh repo margins would impair demand for Italian debt: facilities for clearing this debt are diverse.
In any case it’s a bit of a red herring. At these levels (and volatility) quite simply Italian government debt is dying because real money investors are staying well away. Same as it was in July when Italy paper first jumped off a cliff, same as it is now.