Italian short-term debt costs halved at auction on Wednesday as a new austerity package and cheap long-term liquidity from the European Central Bank won Rome some respite in thin year-end markets. But analysts warned markets tensions could easily reignite and pointed to a new test on Thursday, when Italy will sell up to 8.5 billion euros of longer-term bonds, including three- and ten-year paper. On Wednesday, Italy sold 9 billion euros of six-month BOT bills at an average rate of 3.25 percent, down from a euro lifetime record of 6.50 percent at an auction last month. Demand totalled 1.69 times the amount on offer, ... (full story)