Italy-Germany 10-year bond yields spread stretches to widest gap in three months
Italian bonds are under pressure again, resulting in a surge in yields
The rout in Italian bonds is continuing into the new day after Italian deputy PM Salvini remarked that the government is ready to exceed the 3% budget deficit limit yesterday.
This is one of those things that don't really matter for the euro until it does but the heightened sensitivity of political risks ahead of the European Parliament elections will certainly make this a hot topic in the coming weeks.
As such, it could be a potential factor weighing on the single currency during the period.
Currently, we're seeing the yields spread between Italy and Germany 10-year bonds stretch to 286 bps and that's the widest the gap has been since 11 February.