White House economic adviser Larry Kudlow said on Monday that talks over a coronavirus relief package have slowed.
Ahead of the ECB on Thursday and the US presidential election in just one week, we expect EGB (euro government bond) markets to stay in a tight range with no additional risk positions being taken on.
Italy is set to raise 10 billion euros ($11.8 billion) from a new 20-year bond which drew strong demand, a lead manager said, with bids topping 84 billion euros.
UniCredit analysts were expecting 6 billion to 8 billion euros, which would have already taken Italy's funding to 77% of its target amount for this year.
The EU needed to reach an agreement quickly on the fund but much negotiation was still needed.
We don't anticipate a fast agreement (little in the EU moves quickly), but would be cautious around putting too much weight on negative-sounding headlines, which are almost certain to be seen.