Loading ...As a reminder, Italy agreed a deficit target of 2.04 percent in December, averting a major fall-out with the EU, though this was based on a growth assumption of 1.0 percent. Slowing growth in Italy could make it harder for the country to remain within EU rules. As a result of the downgrade, Italian 10Y yields popped higher, rising near 2019 highs, which is notable because when the report first hit yesterday, markets were largely oblivious and instead were congratulating themselves on the 5x oversubscribed Italian 30Y bond that priced yesterday tighter than expected. Today is the hangover.
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