LONDON, Dec 5 (Reuters) - Italian government bond yields fell across the curve on Monday, and the price of insuring against a default was also lower after the country's Prime Minister unveiled sweeping austerity measures.
The 30-billion-euro austerity package includes tax hikes and an increase in the pension age and comes ahead of a week of meetings between euro zone leaders expected to result in significant steps towards a fiscal union.
Italian bond yields were down as much as 40 basis points at the front-end of the curve with 10-year yields 26 basis points lower at 6.49 percent.
Five-year credit default swaps were quoted 14 basis points narrower at 440 bps by data monitor Markit.
Spanish bond yields also eased led by the front-end of the curve where two-year yields were around 15 bps lower at 4.71 percent.