Bonds of Italy, Spain Narrow Gap With U.S., German Yields
Investors Pile Into Debt of Europe’s Former Laggards
Surging investor demand has driven down yields on the debt of Italy and Spain, two of Europe’s laggards, to levels previously reserved for ultra-safe countries such as the U.S. and Germany.
The gap between yields on Spanish and Italian government debt and U.S. Treasurys is the narrowest it has been in four years. Spanish and Italian bonds maturing in a decade now yield about 3.2%. U.S. Treasury debt, meanwhile, yields about 2.68%—a rate that has moved higher in the last year. Ultra-safe German 10-year bonds are yielding about 1.56%.