Italian central bank: bond spread should be 200

The Italian central bank said the spread between Italian and German bond interest rates "should be set at values on the order of 200 points". The spread between Italian bonds and the German benchmark was 425 basis points at 16:20 on Tuesday. "The recent trend in the spread is largely due to the contagion phenomenon (from the eurozone debt crisis) not tied to the background conditions of the country," the Bank of Italy said in a report. The spread is a barometer of Italy's borrowing costs and an indicator of investor confidence in the country's ability to weather the eurozone crisis.