Investors Pile Into Italian Bonds After Moody’s Reprieve

This picture taken on July 1, 2016 shows the headquarters of Monte Dei Paschi di Siena bank on in Siena, in the Italian region of Tuscany. Italy's number-three bank, Banca Monte dei Paschi di Siena, took a hammering on the stock market on July 4, 2016 as the European Central Bank told it to slash its large bad-debt burden. Investors, many of them shaken by Britain's vote to leave the European Union, are fretting over the fragile balance sheets of debt-laden Italian banks. / AFP / GIUSEPPE CACACE Photo credit should read GIUSEPPE CACACE/AFP/Getty Images

LONDON—Italian government bonds rallied on Aug. 21 after Moody’s extended the deadline for its review of the country’s rating, providing some relief for investors who expected a downgrade imminently.

Moody’s, which last month placed Italy’s “Baa2” rating on a review for a downgrade, said it was pushing back its decision to gain “greater clarity on (Italy’s) fiscal path and reform agenda”.