Italian government bonds rallied on Tuesday (2018-08-21) after Moody’s extended the deadline for its review of the country’s rating, providing some relief for investors who expected a downgrade imminently.
Moody’s, which last month placed Italy’s “Baa2” rating on a review for a downgrade, said it was pushing back its decision to the end of October as it seeks to gain “greater clarity on (Italy’s) fiscal path and reform agenda”.
Italy’s 10-year government bond yield dropped eight basis points to 2.96%, dipping below 3% for the first time since Aug.
It is also down 16 bps so far this week, its biggest two-day fall in two months.
Reuters, Abhinav Ramnarayan, 2018-08-21, “Investors pile into Italian bonds after Moody’s reprieve”