European equity markets were under pressure on Wednesday on concerns about the global economy, while a bond auction in Italy was doing its bit to weigh on sentiment.

The Italian Treasury issued 12-month bills for €8bn at a higher yield than in the prior auction.

The bills demanded a yield of 1.941% compared with the 1.692% rate seen at the September 12th auction and the highest since mid-August. However, demand was slightly better with the bid-to-cover ratio rising from 1.65 to 1.77.

Italy also issued three-month bills for €3bn at a yield of 0.7655 (vs. prior 0.7%) and a bid-to-cover ratio of 2.79 (vs. prior 2.25).

Talking to The Telegraph about the debt sale, Nicholas Spiro of Spiro Sovereign Strategy said: "Italian sovereign debt continues to benefit from a more credible ECB-backed fiscal backstop and investors' willingness to differentiate more between Spain and Italy.

"However, today's sale, with a slight uptick in yields, is a reminder that Italy is by no means out of the woods. Although demand held firm, the fact that yields rose at a sale of short-dated paper is concerning and underscores the fragility of investor sentiment."

The Italian risk premium stood at 363 basis points by noon on Wednesday with the 10-year yield on the secondary market at 5.11%.

SB

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