FX.co ★ Italy 10-Year BTP Yields Near October Highs Ahead of US Data

Italy's 10-year BTP yield remained just under 3.45%, hovering near its peak since mid-October. This status came as investors absorbed revised economic forecasts from the European Commission and anticipated delayed US data, particularly September's employment figures, which could offer insights into the Federal Reserve's future policy. The Commission adjusted its GDP forecast for Italy, predicting a 0.4% growth in 2025, down from the previously expected 0.7% in spring. This adjustment is attributed to weak net exports and the ramifications of US tariffs. However, growth is expected to pick up to 0.8% for both 2026 and 2027, driven by investments financed by the Recovery and Resilience Facility (RRF). For the Eurozone as a whole, the 2025 growth forecast was raised to 1.3% from 0.9%, strengthening the belief that the European Central Bank (ECB) will maintain steady interest rates. In the US, expectations for an interest rate cut by the Fed in December diminished, reflecting varied perspectives among Fed officials. Meanwhile, Italy's 2025 fiscal plan is under parliamentary review, aiming to reduce the budget deficit to 3.0% from 3.4% in 2024, which could enable Italy to exit the European Union's excessive deficit procedure by 2026.