FX.co ★ Italy BTP Yields Near 4-Week High Ahead of Moody’s Review

Yields on Italy’s 10-year BTPs remained close to their four-week high of 3.4%, as investors exercised caution in anticipation of Moody’s upcoming review of the country’s credit rating, scheduled for Friday. Italy currently holds a Baa3 rating with a stable outlook, positioned just one level above the non-investment grade threshold, with the market perceiving minimal risk of a downgrade to junk status. The European Central Bank appears to have concluded its rate-cutting phase, signaling attentiveness to inflation concerns while maintaining flexibility regarding future interest rate decisions. In the United States, the likelihood of a December rate cut by the Federal Reserve grew stronger following Challenger data, which revealed that layoffs reached their highest October level in two decades, dampening the optimism generated by Wednesday’s unexpectedly robust ADP employment and ISM services reports.