By William L. Watts
FRANKFURT (MarketWatch) -- Italian government bonds continued to rally Thursday, pushing the benchmark 10-year yield IT:10YR_ITA -4.12% below the 5% level for the first time since August. The 10-year yield was seen at 4.98% in recent action, down 0.22 percentage point from Wednesday, according to electronic trading platform Tradeweb. Italian and Spanish bonds extended a recent rally Wednesday after the European Central Bank allotted to European banks nearly 530 billion euros ($707 billion) in cheap loans at its three-year long-term refinancing operation. Portuguese government bonds have missed out on the rally, however, with yields rising sharply on fears the country may follow fellow bailout recipient Greece into a form of default. The yield on 10-year Portuguese bonds rose 0.06 percentage point to 13.94% after spiking higher on Wednesday.
