Investors paid little attention to Italy’s political intrigue this month, focusing instead on early signs of economic recovery and the outgoing government’s commitment to budget rigor. That may start to change.
Euro-area government bonds surged, led by Italian and Spanish securities, after the European Central Bank unexpectedly cut its benchmark interest rate to a record low, boosting demand for fixed-income assets.
Finance Minister Michael Noonan says Ireland won’t need any more aid after becoming the first of the rescued euro members to exit a bailout program next month. The country’s banks might yet test that optimism.