Italy’s bonds rocked by UK referendum

Italy’s bond markets were rocked by the Brexit vote amid reports Rome is considering injecting capital into some lenders battered by a fresh selloff.

The yield on the Italian 10-year bond rose to 1.52% yesterday, up from 1.40% before the UK referendum vote last week, as the country’s bonds underperformed its eurozone peers.

In contrast, the implied cost of borrowing for Ireland on debt markets for 10-years has remained little changed at 0.77%, while the so-called flight to safety meant investors are theoretically paying money to lend money to the German government, with the bund 10-year yield trading yesterday at minus 0.10%.