Bond yields fall to lowest on record as Italy sells 12-month debt

Italy saw borrowing costs fall to the lowest level on record at an auction of 12-month government bonds on Tuesday, amid easing concerns over the health of the euro zone’s third-largest economy.

Italy’s Treasury sold the full-targeted amount of EUR6.5 billion worth of 12-month government bonds at an average yield of 0.688, a record-low and down from 0.999% at a similar auction last month.

The yield on Italian 10-year bonds stood at 4.156% following the auction.

The euro was lower against the U.S. dollar following the auction, withEUR/USD easing down 0.15% to trade at 1.3386.

Meanwhile, European stock markets held on to losses. Italy FTSE MIB Index fell 0.35%, the EURO STOXX 50 dipped 0.4%, France’s CAC 40 shed 0.25%, Germany’s DAX slumped 0.25%, while London’s FTSE 100 eased down 0.2%.