Rally in Italy's debt to continue if new government revives reforms

MILAN (Reuters) - A rally that has pushed Italy's long-term borrowing costs to their lowest since late 2010 is seen continuing if the newly-designated prime minister can form a government and revive the reform agenda put on hold at the end of 2012.

Italian President Giorgio Napolitano on Wednesday asked centre-left deputy leader Enrico Letta to form a new executive, signalling the end of a damaging vacuum since elections in the euro zone's third largest economy in February.