Italy 10-year yields climb to highest since February last year as bond rout continues


Italy 10-year bond yields are up by a whopping 57 bps today

Italy 10-year yields

Meanwhile, European equities are still being pressured on the day with the major indices down by 3-4% on the day currently. Treasury yields are also higher across the curve, with 10-year yields up by 12 bps to 1.20% on the session.

The market is continuing to hit the panic button and selling everything, as we are seeing liquidation trades everywhere with investors flocking in search for cash.

Funding pressures have eased slightly but they are still not quite normal conditions just yet. If this persists for another few weeks, there is a real threat that a funding/liquidity shock may quickly turn into a credit shock – and that will not be good news whatsoever.

Or perhaps the market is starting to question how is all these massive-scale fiscal stimulus packages going to be paid for? There are no easy answers for what is happening here.

Read More…