Italian 10-year yields surge past critical 7% level

Silvio Berlusconi's pledge to resign has failed to calm investor nervousness on Italian sovereign debt, with yields on 10-year bonds rising above the crucial 7% mark this morning.

Berlusconi said last night he would step down once the Italian government has passed their austerity budget, but yields on 10-year government debt have continued to climb in early trading. In breaching the 7% mark, Italian debt yields have now reached the level at which the likes of Greece, Portugal and Ireland were forced to turn to the EU and IMF for bailouts. Clearing house LCH Clearnet SA raised initial margin requirements on Italian bonds earlier this morning after yesterday's rise took the yield past the 6.75% mark. The yield continued its acceleration after breaching the 7% ...