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Italy 1-Year Debt Costs Jump as Sentiment Sours

• http://www.cnbc.com, By: Reuters
 Rome paid 2.84 percent to sell one-year debt, up from 1.405 percent at the previous auction in mid-March, reaching the highest level since December.

 Contagion fears from neighbouring Spain's budget troubles and the slow progress of much-needed structural reforms have halted a falling trend for Italy's debt costs.

 The authorities were quick to point to factors beyond Italy's shores.

 "Even though demand was strong, as had been expected, the result of the auction reflected increased tensions on sovereign bonds in the euro area that resulted in a significant increase in yields," the central bank said in a statement.

 Italy's industry minister said the rise in borrowing costs was not a reaction to the government's planned labour reforms.

 The Treasury raised the planned 11 billion euros in 12- and three-month bills, with bids totalling 1.6 times the amount on offer.
 
It will offer up to 5 billion euros on Thursday, including its March 2015 BTP bond and three off-the-run issues and yields are expected to rise there too.

 One-year yields had been declining since mid-November when they hit a euro lifetime record of 6 percent.

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