Sterling soared against the euro and the dollar as fears that the UK will crash out of the EU receded.

Italian assets were pummeled again yesterday on mounting concern over the populist coalition’s fiscal plans, with the moves rippling across European debt markets.

Debt levels that quadrupled in a decade have made emerging markets vulnerable to tightening financial conditions in the era of rising US interest rates, Fitch Ratings said.

Further strong growth in the construction industry has set the scene for Finance Minister Paschal Donohoe’s summer update of the Government’s economic and fiscal targets later this week, the last before his first budget in October, but a renewed focus on tax and multinationals by France could sour the upbeat outlook.

Irish bank shares posted gains despite continuing fears about the health of Italian lenders and a cautionary report from Fitch Ratings on the outlook for Irish lenders after Brexit.

Portugal’s bonds rose the most since June after the country’s finance chief said that rating company DBRS has a positive assessment of the nation’s fiscal efforts, strengthening the government’s conviction that it will keep its investment-grade rating.

The European Commission’s ruling Apple must pay the State €13bn in back taxes could be mixed news for the country’s debt credit rating, but has exposed divisions in the Fine Gael-led minority Government, Fitch Ratings has said.

Fitch Ratings yesterday signalled it would not downgrade Ireland’s credit rating despite the huge market turmoil and warnings of slower growth here after the UK voted to quit the EU.

The appointment of the new Fine Gael-led minority administration has removed most but not all uncertainty, Fitch Ratings said yesterday.

As stock markets climb around the world, Chinese traders aren’t celebrating.

The Irish and Spanish economies have pulled away from the group of countries in the eurozone periphery, but employment growth, bad loans and credit remain issues, according to a credit ratings firm Fitch Ratings.

The implied cost of borrowing on bond markets for Ireland yesterday fell to its lowest level since April as international traders — as had been expected — ignored the uncertain outcome of the Dáil election.

The European Commission says there are “big differences” in talks with Portugal about the nation’s draft budget plan for 2016, which aims to reverse measures that the previous government implemented as part of a bailout programme.

One of the leading global credit rating agencies has given a broad endorsement to plans that could see courts given the power to limit the rates banks charge standard variable rate mortgage customers.

European regulators seem intent on making it harder for banks to fund themselves.

Finland came a step closer to losing its top credit grade at Fitch Ratings as divisions within the government led to a failure to stem the growth of public debt.

DBRS, the world’s fourth-largest credit rating company, has agreed to be acquired by the Carlyle Group and Warburg Pincus for about $500m (€409m).

Euro-area bond yields near record lows are leading governments to be complacent, according to Standard and Poor’s head of sovereign ratings Moritz Kraemer.

As Ireland’s chances of a refund on the cost of saving its banks fade, bond investors are helping the Government’s latest plan to reduce the debt burden.

An upcoming roadshow for Ryanair has been met with a warm investor reception but the borrower will likely have to field queries about its ambitious expenditure programme and a fall in profits.

Ireland’s rating will probably be raised for the second time in less than six months by Moody’s Investors Service as the economy stabilises and concern that the eurozone may be under threat eases.

Fitch Ratings has affirmed the United States’ credit ratings at “AAA” with a stable outlook, removing the distant danger that it might downgrade the world’s largest economy.

Ratings agency Fitch believes that the number of non-performing loans at the two main Irish banks has finally levelled out.

The level of mortgage arrears of over 90 days will peak in 2014, having reached a new high of 18% in the final quarter of last year, according to Fitch Ratings.

Russian President Vladimir Putin has opened his wallet in the battle with the European Union over Ukraine’s future, saying Moscow will buy $15bn dollars (€10.9bn) worth of Ukrainian government bonds and sharply cut the price of natural gas for its economically struggling neighbour.

Fitch Ratings raised the prospect of Irish banks reporting a profit next year, helped by releasing funds set aside to cover bad-loan losses from Europe’s worst property collapse.

Portugal exchanged €6.64bn of bonds to reduce debt repayments due in the next two years as it tries to exit its €78bn international bailout without needing another rescue.

The Standard & Poor’s rating agency has downgraded France’s principal credit rating by one notch to AA.

Fitch Ratings has revised Spain’s outlook upwards from negative to stable and affirmed the country’s ratings at “BBB”.

Eurozone jobless numbers this week may lay bare a fault line scarring the region’s recovery, as evidence of Germany’s employment muscle contrasts with the political quagmire destroying work in Italy.

BlackRock chief executive Laurence Fink, who last year said he would invest 100% of his personal wealth in equities, said stock markets may decline as a result of the political debate over the debt ceiling.

Ireland’s government bonds fell yesterday, outperforming all their eurozone counterparts after Moody’s Investors Service raised the outlook on the nation’s debt, citing stability in its access to financial markets.

The Treasury in England will rule on whether to split Royal Bank of Scotland into a “good” and “bad” bank shortly after the Conservative Party conference, according to a report.

Fitch Ratings has placed the United Kingdom’s AAA rating on review for a downgrade.

Ireland’s debt agency may seek to sell a syndicated bond through banks as early as next week after the Government’s borrowing costs fell in the wake of an accord to ease its bank bailout burden, analysts said.

The NTMA will tomorrow raise €500m through an auction of three-month treasury bills.

Ireland’s bankers and bailout masters are pressing the Government to make it easier to seize homes bought as investments to rent out as defaults on the loans surge.

Irish pension funds may buy as much as €10bn of domestic sovereign annuity bonds within three years, according to Zurich Life Assurance Plc, the first insurer cleared by regulators to offer such products as the country returns to debt markets.

The Iseq Index advanced 4.14 points yesterday to close at 3,193.33.