The Fully Monti: Yields Spike on Italian PM Resigns, Venezuela Yield Drops

Confounded Interest ^ | 12/10/2012 | Anthony B. Sanders

[whitedog57]

Italian government bond yields jumped on Monday after Prime Minister Mario Monti’s decision to step down early raised worries over the future pace at which the heavily indebted country reforms its economy.

While investors are clearly nervous about Mario Monti’s resignation as PM of Italy, investors seem to be signalling increased optimism about Venezuela’s Chavez’s return of cancer.

Venezuelan bonds surged, sending benchmark yields to a five-year low, as speculation mounted that President Hugo Chavez will be unable to complete his third term after he acknowledged a recurrence of his cancer.

I am sure that Hugo Chavez would have preferred a different bond market reaction.

Despite the turmoil in Italy and Venezuela, US Treasury markets remain calm ahead of the Fed FOMC meeting on 12/12.

Notice that gold is up +9.50.

[whitedog57]

Investors show relief that Chavez may actually not finish his destructive term in office.

[Max in Utah]

You go, Hugo! (and soon please)

[BfloGuy]

Investors show relief that Chavez may actually not finish his destructive term in office.

Um, that wasn't relief -- it was panic.

Venezuelan bonds surged, sending benchmark yields to a five-year low

Now, they may well despise Chavez, but when bond prices rise, interest yields go down. They're scared sh**less about what's to come and raising their asking price to protect against loss.