LONDON, May 25 (Reuters) - The gap between Italian and German 10-year government bond yields stretched to its widest level since June 2017 as uncertainty over an incoming government continued to weigh on the debt outlook in the euro zone’s third largest economy.
Italian Prime Minister-designate Giuseppe Conte this week began putting together his cabinet team, with party leaders pushing for an 81-year eurosceptic economist to be given the pivotal post of economy minister.
The prospect of an anti-establishment Italian government has pushed the Italy/Germany 10-year government bond yield spread about 60 basis points wider since last Wednesday, May 16.
On Friday, the spread widened further to 196.8 basis points, the highest since June 2017. (Reporting by Abhinav Ramnarayan; Editing by Saikat Chatterjee)