2025.11.0411:31:47UTC+00Italy’s Bond Yields Steady After Rating Boost

Italy's 10-year BTP yield remains steady around 3.4% as investors assess the latest credit rating announcement and the monetary policy outlook in the wake of the recent ECB meeting and significant economic data releases. Scope Ratings has reaffirmed Italy's BBB+ rating, upgrading the outlook to positive following recent improvements noted by Fitch and DBRS. These upgrades reflect enhanced public finances and ongoing reforms. The agency predicts the budget deficit will decrease to 3.0% by 2025 from 3.4% in 2024, potentially allowing Italy to exit the EU’s excessive deficit procedure by 2026. Recent economic indicators reveal a drop in inflation to a one-year low of 1.2%, stagnant growth in the third quarter, as well as a slight increase in unemployment, which remains close to historically low levels. On the policy side, the European Central Bank opted to maintain current rates for a third consecutive meeting while sticking to its inflation projections. Meanwhile, the Federal Reserve implemented a second 25 basis point reduction this year, with Chair Jerome Powell stating that additional cuts in December are "not a foregone conclusion."