Italy 10-year bond yields fall sharply from levels yesterday
At the peak of the rout yesterday, yields climbed towards 3% but ended the day around 2.4%. Despite yields trickling higher since the morning open, they are still about 90 bps lower than the levels seen yesterday and that should give the ECB some comfort.
All of this will also help the Italian government as they look to tap the deficit in order to introduce more fiscal measures to fight back against the virus.
That said, keep an eye on European bonds over the next few sessions. The movement there will be a key factor in the market deciding whether or not the ECB bazooka overnight will be enough to provide shelter for the economy in coping with the virus fallout.
