1217 days ago • Posted by William Ramstein
Italy is the EU's best-performing debt market this year as yields hit lows thanks to the European Central Bank's $2.3 Trillion pandemic asset purchase program. Italian 10-year yield premium over the German bund is a preferred trade for the next year. Commerzbank chief say he is bullish on the spread and calls the trade a high up in an otherwise low-return environment. The ECB is keeping rates and debt service costs low which makes the debt levels sustainable and offers decent yield. Italy's 30 year bonds however pay the highest rate for the tenor among developed markets and some argue buying 30 years bonds and selling German bunds equivalents while doing the inverse with 10 year bonds. Source; Bloomberg
