Despite the arrival of a hard-right Italian government under Premier Giorgia Meloni, the spread has dropped by 40 basis points since the European Central Bank’s last meeting in December
German Chancellor Olaf Scholz is calling for joint EU funding for an effort to boost European green energy.
Bond investors were heartened by the news that the bloc’s most powerful nation was now behind joint financing that would in particular help countries with more serious deficits (such as Italy) to fund their green investments.
Banking sector, which lost investors’ confidence more than a decade ago and has barely ever regained it, has enjoyed a rally of more than 40% since hitting lows last summer.
John Authers Bloomberg 12 January 2023