Yields on Italy’s 10-year BTPs hovered around 3.39%, dipping slightly from a two-week high of 3.42% on October 27, as investors remained cautious ahead of central bank decisions. Italy’s economy showed signs of strengthening, with business sentiment exceeding forecasts in October to its highest level since May 2024, while the consumer confidence index rose for a second consecutive month. The Italian government has approved the 2026 budget totaling €18.7 billion, targeting a fiscal deficit of 2.8% of GDP, and submitted it to parliament for year-end approval. Investors are awaiting key euro area inflation data later this week, which could influence expectations for future ECB policy moves. The European Central Bank is widely expected to keep rates on hold on Thursday, while markets are nearly certain the Federal Reserve will implement its second 25-basis-point rate cut of the year on Wednesday.