FX.co ★ Italy 10-Year Yield Edges Down

Italy's 10-year government bond yield slightly decreased to 3.54% as investors assessed significant data regarding Eurozone inflation and U.S. private employment. The September inflation data indicated enduring price pressures within the Eurozone, with inflation recorded at 2.2%, effectively eliminating the possibility of further rate cuts by the European Central Bank this year. In the United States, private sector payrolls unexpectedly contracted in September. Meanwhile, the looming government shutdown continues to raise concerns, particularly due to the suspension of crucial data releases, including the official employment report. On the domestic front, Italy's tax revenues have exceeded expectations, buoyed by employment growth and inflation. This trend suggests that Italy's budget deficit could likely fall below the European Union's 3% of GDP threshold by 2025, a year earlier than anticipated. Additionally, Italy is set to hold regional elections in seven regions this autumn, with current polls showing that the Brothers of Italy (Fratelli d’Italia) party retains support above 30%, while backing for the Democratic Party and the Five Star Movement has increased.