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Italian Yields Surge As New Elections Loom
Having perplexed traders for months with their honey badger-like gains even as Italy exhibited its traditional political chaos, decisionmaking gridlock and a delightful inability to form a coalition government pushing the country to the verge of new elections, overnight Italian bonds were finally rattled, as the risk of a fresh Italian vote as soon as July and political uncertainty were finally appreciated by traders, sending the yield on 10Y BTPs 10bps higher to 1.87%, set for biggest selloff since December, and rising to the the highest level since March 28. Traders are also keenly watching the 10Y Italy-Germany ... (full story)