The yield on Italy’s 10-year BTP climbed to 3.56%, extending last week’s gains to reach its highest level since early October, following the European Central Bank’s decision to leave monetary policy unchanged and signal that further cuts are unlikely for at least a year. Last week, the ECB left interest rates steady for a fourth consecutive meeting, noting that the eurozone has weathered US tariffs better than expected. Stronger-than-anticipated economic data also prompted the central bank to upgrade its growth outlook once again, projecting eurozone GDP at 1.4% in 2025, up from 1.2%, while headline inflation is expected to hover near the 2% target through 2028. On the fiscal front, the ECB cautioned that Italy’s 2026 budget measures could weigh on banks’ liquidity and lending conditions, as well as investor confidence, adding pressure to the country’s borrowing costs.