Here we go again...

Italy yields

10-year BTP yields have climbed by more than 20 bps at the open to 1.74% following the close of 1.53% yesterday. At the same time, the spread between 10-year Italian and German bond yields have widened to its biggest gap in over five weeks.

This comes amid renewed risks of the government collapsing and an early election being triggered after the summer. As mentioned earlier, this is going to be an area of concern for the euro in the coming weeks.

It may not be affecting the single currency all too much just yet but much like the 2018 election, it may not matter until it actually matters i.e. markets may be closing one eye on the issue now but it doesn't mean that it will go away.