FX.co ★ Italy’s BTP Yield Eases to 3.9%

Italy’s 10-year BTP yield fell to 3.9%, easing from an intraday high of 4.12%—its highest level since mid-2024—after an initial market jolt triggered by President Trump’s decision to delay strikes on Iran by five days, officially attributed to “productive talks” with Tehran. Iran’s Fars News Agency swiftly denied that any such negotiations had taken place, insisting instead that the US move came in response to Iran’s threat to target power plants in West Asia. Despite the geopolitical uncertainty, traders continue to price in at least three ECB rate hikes in 2026. This follows the central bank’s decision last week to leave interest rates unchanged while revising its outlook: the ECB raised its inflation projections and downgraded growth forecasts, cautioning that the escalating Middle East crisis and surging energy prices pose mounting risks to the economic outlook.