Pressure on Italian and Spanish government bonds ease sharply
Moves by the European Central Bank (ECB) to buy up the bonds of Spain and Italy has taken the pressure off.
And the euro also benefited strengthened 0.5pc to $1.4347 in early trade.
The cost of borrowing on the Italian 10-year government bond was 5.602pc, down sharply from 6.189pc on Friday evening while the Spanish 10-year bond was at 5.507pc after 6.271pc.
Last week they had been hovering above 6pc – a rate considered unsustainable and raising fears that they may need a bailout after Greece, Ireland and Portugal.
Both Italy and Spain had promised to rein in their public finances before the additional ECB support.
The ECB earlier welcomed these moves and said “decisive and swift implementation by both governments as essential in order to substantially enhance the competitiveness and flexibility of their economies, and to rapidly reduce public deficits.”