MIB lifted by bond auction

A successful bond auction by the Rome administration has pushed the Italian equity market higher.

The Italy 40 is trading at 21,789, up 1.24% on the day. The market was already up over 1% in early trading when the Italian government reported the ten-year yield dropped to a record low of 3.22%, helping the market continue its advance. The yield on a bond is effectively the cost of borrowing, and this suggests that investors are very confident in Italy’s ability to repay its debts.

With no other economic updates expected from Italy today, traders will be focused on tomorrow’s unemployment report and Federal Reserve statement at 9am and 7pm (London time) respectively. In Italy, the jobless rate is 13% and the consensus is for it to remain unchanged. The commentary from the US central bank is more likely to have an impact on the index.

The Italy 40 is above the 50-, 100- and 200-day moving averages, which is a positive sign. The market is finding support at the 50-DMA of 21,216, and could retest the 22,000 level if tomorrow’s Fed statement is dovish.

Italy 40 chart

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