The yield spread on Italian and German 10-year government bonds reached its highest level in a month amid political turmoil in Rome and slowdown in economic growth in the country – 116 basis points. Italy has faced political chaos after the party of former Italian Prime Minister Matteo Renzi left the government, stripping the ruling coalition of its parliamentary majority. As a result, the yield on Italian government bonds rose by 4-7 basis points. The underlying 10-year yield rose 6 basis points to 0.617%.
