The recent global risk rally has been shaped by lower inflation, prospects for policy easing and expectations of a soft landing for growth. While the rally has been led by equities, high yield credit and emerging market debt, it has also extended to longer dated peripheral eurozone sovereign bonds. Italian government debt has often traded as a gauge of risk appetite within the Eurozone, and proved popular with investors, looking to benefit from the extra yield pick-up over Bunds. But is there more than meets the eye? Despite not having full monetary sovereignty, Italian BTPs, like all other Eurozone government debt, ... (full story)