Tuesday May 24, 2022

Itlie sold bonds for 4.75 billion euros, the year fell sharply

Italy managed to place the last year’s bonds on the market in a closely watched five-year auction in the maximum offered volume of 4.75 billion euros, in the amount of about 121 billion crowns. Compared to the previous issue, the year dropped sharply, while the investor’s interest weakened.

The year for the toll issue fell to 4.83 percent, while in the previous comparable auction it was 5.62 percent.

The five auctions were only the first bid of Italian fixed-term bonds since the beginning of the year.

Analysts then assessed the outcome of the auction relatively favorably, but later became strongly disappointed with the so-called bid-to-cover ratio. He expresses how much interest investors had in bonds. The value of the indicator for the main issue due in November 2014 reached only 1,218. This means that demand has surpassed supply by less than 22 percent. In the previous auction, this ratio was about 1.36.

The euro fell down in the first reaction and from values ​​around 1.2840 USD first reached 1.28 USD, fell short and to 1.2780 USD. Later, however, the exchange rate stabilized again at around $ 1.28.

To hurry, help the central bank

The solid result of the auction is probably due to the cheap pension provided by the European Central Bank (ECB) and a number of financial institutions in the euro area.

Shortly before Christmas, the ECB launched its first program of third parties, which commercial banks can draw on with a minimum of one year. st bank of these pensions, st use for investments. For the same reason, Spain, for example, is able to sell short-term bonds without any problems.

The key issue matured in November 2014 less than a year after Losk, but Italy sold two more issues, one maturing in July 2014 and the other in August 2018. Although these issues were not part of the bill, the demand for them was solid.

Itlie sold a short-term treasury bills on Thursday, with a solid result. However, short-term bonds generally sell much better than long-term, or they involve less risk. The demand is much better than last November, when nervousness around developments in the euro area was at its peak. At that time, the year of Italian bonds rose to 7.89 percent. This was a record during the existence of the euro area.

Itlie is one of the most indebted countries in the developed world, with a total debt of 1.9 trillion euros (about 48.6 trillion K). About 300 billion euros will have to be refinanced in this year. Concerns about being able to secure so many pensions at all are the main reason why Itlie is in the spotlight of both economists and the media for the current debt crisis of the eurozone.

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