Italy Bond Yields Approach Eight Year Lows Ahead of New Prime Minister

Center-left Matteo Renzi

Italian bond yields edged back towards eight-year lows on Friday as investors warmed to the prospect of centre-left leader Matteo Renzi taking over as prime minister from low-key party rival Enrico Letta, with a pledge for more "ambitious" government.

Letta plans to tender his resignation to President Giorgio Napolitano on Friday after his Democratic Party supported Renzi's call for a new government. Napolitano is then expected to call on Renzi to form a new administration.