(Bloomberg) -- Italian bonds dropped, with 10-year yields touching their highest level in over a month, ahead of a budget meeting between populist political leaders and Financial Minister Giovanni Tria.
The securities, which have been buffeted over the past few months following the election of a populist government, declined after Il Sole 24 Ore reported that Tria will meet with Deputy Prime Ministers Luigi Di Maio and Matteo Salvini on Thursday. A sale of 4 billion euros ($4.65 billion) worth of bonds in Spain also weighed, as well as escalating trade tensions between the U.S. and China.
This is a “triple whammy” of factors contributing to the decline in Italian bonds, Martin van Vliet, an interest-rate strategist at ING Groep (AS:INGA) NV, said in emailed comments.
The yield on Italy’s 10-year note rose as much as 11 basis points to 2.89 percent, the highest since June 27. The spread over that of their German counterparts was at 243 basis points, the highest level since July 5.
Ten-year yields will likely test 3 percent before the government’s budget in September, van Vliet.