US and Italian yields coming off? – Danske Bank

Analysts at Danske Bank point out that both US and Italian yields came off a bit from recent highs for separate reasons and as Brexit optimism grew. 

Key Quotes

“Overall it would have been a rather uneventful session had it not been for Trump . The US President - again - expressed dissatisfaction with the pace of Fed hikes given what he considered a lack of inflationary pressure.”

“Following the warning from the EU Commission over the weekend that the Italian fiscal budget not breach eurozone spending, the League's Matteo Salvini accused both EU officials and speculators of seeking to bring down Italy. However, spread widening eased after Italy's Finance Minister Giovanni Tria said that the government is worried about the 'unacceptable' yield spread.”

“US yields came off a bit after reaching 7Y highs last week and the 10Y yield is just off the 3.21 mark. During the day, the Treasury curve flattened led by close to a 3bp drop in the 30Y.”