LONDON, Aug 22 (Reuters) - The premium investors demand for holding Italian government bonds over German peers rose to its highest in five weeks on Tuesday.
Analysts cited a number of factors for a selloff in Italian bonds, including renewed focus on political risks and a “risk-off” trading environment in global markets.
Some also cited reports at the weekend that former prime minister Silvio Berlusconi, who leads the centre-right Forza Italia party, has indicated his support for the introduction of a parallel currency.
Italy’s 10-year government bond yield rose 6 basis points to a three-week high of 2.09 percent. That pushed the gap over benchmark 10-year German Bund yields to 167 bps - its widest in five weeks. (Reporting by Dhara Ranasinghe, editing by Nigel Stephenson)