Italy Treasury 29th successfully auctioned an estimated 7.02 billion euros of medium-and long-term bonds, where the 3-year government bond yields declined when compared with the previous release, but bid in a 10-year bond rates close to dangerous levels of 7%. Analysts believe that such a result is Italy debt woes were eased, but the medium and long term, Italy still faces a large medium-and long-term debt pressures.
Italy according to government data released on 29th, of Treasury bonds will be issued on the day to expire in 2014, 2018, 2021 and 2022, where 3-year government bond yields from November 29 to 7.89% per cent, over-subscription rate of 1.36 per cent of the 1.5, this being considered to be Italy's debt crisis has eased the positive signal. However, the auction total did not reach the expected scheduled issuing medium-and long-term bonds of up to 8.5 billion euros, eventually raising only about 7.02 billion euros. At the same time, Italy long-term government bonds and Germany does not narrow the yield spreads between bonds. 10-year government bonds, for example, when the market opened on 29th, Italy and Germany for yield spreads 514 basis points, rose to 522 BP until Italy after the auction ended, post only down to 518 BP.
Analysts pointed out that, at the end of the auction of long-term Treasury bonds will not be easy, Italy successfully auctioned 7.02 billion euros of medium-and long-term bonds, also be regarded as a very positive signal. Move out of the market to Italy subscription has a high enthusiasm of medium-and long-term bonds, and 3-year government bond yields fall, there is a positive point. Has comments said, this times Italy in the long-term bonds smooth auction, stems from two a aspects of causes: a is El Government came to yilai launched of series of crisis should measures, in must degree Shang boost has market of confidence, market on Italy political to and economic situation of concerns emotions has weakened; II is European Central Bank in on December 21 to banking release out 489 billion euro of loan, enhanced has liquidity, for day Italy bonds of auction provides has sources. Of course, the longer term, Europe's largest banks focus more within the next few months may be devoted to stabilize its own assets, does not provide excessive support for countries mired in debt crisis, Italy can get enough support from the eurozone, also on the sidelines of the market.
Also some finance professionals believe that, the day Italy long-term Treasury bonds auction, does not fully achieve the desired results. In their view, only when the Italy under the macroeconomic situation in reverse, a strong growth, Italy may only occur in 10-year bond yields declined.
Italy Prime Minister El at the end of 29th at a news conference on results of the auction on that day expressed "cautious." In his view, the auction result overall is good, but this does not mean that the financial market turmoil is over. He said that Italy Government submitted to the Council of Europe at the end of January next year a new crisis resolution, the new programme will involve the liberalization, competition in the market and to increase employment opportunities and mitigate social contradictions, and so on, hoping to promote Italy's economic growth, alleviate the debt crisis. He also called on the European financial stability Fund to countries mired in debt crisis with more powerful capital support.
Analysts believe that Italy auction results show that has gone through a full year of crisis, the Italy national debt market is finally at the end of 2011 received some breathing space for the time being, but their medium-and long-term debts still exist. First of all, in the upcoming 2012, Italy also need to issue size of about 400 billion euros in bonds, to pay more than 200 billion euros of debt, and filling of 236 billion euro deficit. If the target market's positive response, is still unknown. Secondly, mired in debt crisis in Italy, markets have been watching, wait for it in terms of tax policy and structural reforms to make fruitful achievements in order to promote the growth of the real economy. Therefore, compared with the long-term government bonds in the auction, El next the Government will introduce economic stimulus policies, would be more interesting.