Italy faces a crucial test tomorrow as the technocrat government of Mario Monti launches its first big auction of long-term bonds since a disastrous upset a month ago. The outcome will set the tone for a string of debt sales through early 2012 that risk stretching the eurozone bond markets to breaking point. The EU authorities are hoping commercial lenders will use last week’s flood of cheap liquidity from the European Central Bank to soak up southern European debt and bring yields back under control, starting with Italy’s €8.5bn (£7.1bn) sale of 10-year bonds today. The country must raise €440bn in debt in 2012, ... (full story)