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20.03.202609:08:59UTC+00Italian BTP Yield Retreats Slightly but Hovers Near 2025 Highs

Italy’s 10-year BTP yield slipped to 3.77% on Friday, remaining close to its highest level since April 2025, as the European Central Bank’s warning over mounting inflation—driven by soaring energy prices linked to the Iran conflict—reinforced expectations of imminent rate hikes. Although the ECB kept policy rates unchanged at its Thursday meeting, it struck a more hawkish tone by raising its inflation forecasts and lowering its growth outlook. Major banks now project a rate increase as early as April, with markets fully pricing in a hike by June and assigning a 60% probability to a move in May. ECB policymaker Joachim Nagel indicated that a rate rise as soon as next month is possible if inflationary pressures persist, while François Villeroy de Galhau reiterated the bank’s readiness to act as needed.

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