Italy’s 10-Year BTP Yield Falls to Three-Month Low

Italy’s 10-year BTP yield declined further below 3.4%, touching its lowest level since November 12, as investors rotated into safer assets amid deteriorating risk sentiment. Softer-than-expected US inflation data further supported bond markets, strengthening the view that the Federal Reserve may have room to resume interest rate cuts. In the euro area, market participants evaluated signals that the European Central Bank remains broadly comfortable with the euro’s recent appreciation. Investors also weighed reports that Bank of France Governor François Villeroy de Galhau, seen as a dovish voice within the ECB, could step down earlier than anticipated. ECB President Christine Lagarde reiterated last week that the inflation outlook is in a “good place,” while downplaying concerns about the strength of the single currency. Money markets are currently pricing in just a 30% probability of an ECB rate cut by December.

Italy’s 10-year BTP yield fell to 3.38%, touching its lowest level since November 12, as investors awaited US consumer price index data later in the day for further insight into the Federal Reserve’s policy trajectory. The move followed stronger-than-expected US employment figures released on Wednesday, which cooled expectations of an imminent rate cut by the Fed. In Europe, investors assessed indications that the European Central Bank remains broadly comfortable with the euro’s recent appreciation. Markets also considered reports that Bank of France Governor François Villeroy de Galhau, viewed as a dovish policymaker, could step down earlier than anticipated. ECB President Christine Lagarde said last week that the inflation outlook remains in a “good place,” while playing down concerns about the strength of the single currency. Money markets currently price in only a 30% probability of an ECB rate reduction by December.

Italy 10 Year Government Bond Yield decreased to 3.40%, the lowest since January 2026. Over the past 4 weeks, Italy 10Y Bond Yield lost 3.61 basis points, and in the last 12 months, it decreased 8.30 basis points.