LONDON, Aug 29 (Reuters) - Italian government bond yields fell 4-5 basis points on Wednesday, with analysts citing media reports that Italy may reach out to the European Central Bank for new bond buys.
The Italian government plans to reach out to the ECB for a new round of quantitative easing to avoid a ratings downgrade, local daily La Stampa reported.
Itay has been searching for allies to support its bonds in recent weeks, with the United States and China voicing little concern about a recent widening in Italy’s bond yield spread over euro zone peers.
Italian two-year bond yields were last down 5 basis points at 1.24 percent. Ten-year yields fell 3 bps to 3.15 percent, narrowing the gap over German Bund yields to 277 bps from 280 bps late on Tuesday. (Reporting by Virginia Furness; Editing by Dhara Ranasinghe)