Italy sells 2-yr bonds at slightly higher yield
MILAN, Aug 27 (Reuters) - Italy paid 1.87 percent to sell two-year bonds at auction on Tuesday, marginally up from a month ago, reflecting investors' concerns about a possible government crisis in the euro zone's third-largest economy.
Italy sold 2.98 billion euros of two-year, zero-coupon bonds and a total of 1 billion euros of two inflation-linked BTPei bonds maturing in 2018 and 2026.
The Treasury had offered to sell up to 4 billion euros in bonds on Tuesday, ahead of an 8.5 billion euro auction of six-month bills the following day and a more challenging sale of five- and 10-year BTP bonds for up to 6 billion euros on Thursday.
Worries over political instability in Italy have driven its bond yields up in recent sessions, erasing the positive effects on lower-rated bonds from the first sign of an economic recovery in Europe.
However, yields on the two inflation-linked bonds fell on Tuesday compared to the last auction which was held at the end of June.
(Reporting by Valentina Za, editing by Silvia Aloisi)