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| - Italy's borrowing costs dropped to a historic low Tuesday in a further sign of market confidence in prime minister designate Mario Draghi. The yield on Italy's benchmark 10-year bonds fell under 0.5 per cent during morning trading, the lowest level ever recorded for the eurozone's third-largest economy. According to Aurelien Buffault, a bond analyst at Meeschaert Asset Management, the fall is clearly linked to the looming appointment of Draghi as the next Italian prime minister. "The [former] European Central Bank president has a very good reputation on financial markets, he is considered the saviour of the eurozone in the early 2010s," Buffault said. "Furthermore, his arrival [on the political scene] was not really expected, and it has greatly reduced the Italian political risk that hangs over all Italian assets," he added. Draghi is trying to form a national unity government after Italian President Sergio Mattarella summoned him last week to solve a weeks-long political crisis. Since then, the FTSE MIB, the main index on the Milan stock exchange, has closed higher four days in a row and has jumped above 23,000, the highest level in almost a year. Meanwhile the so-called "spread," or yield differential between Italian and benchmark German 10-year bonds, has over the past days fallen under 100 percentage points for the first time since 2015. aa-bh/ar/wai
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