September 25, 2017 / 6:35 AM / in 23 days

Italy-Germany bond yield spread widens after German election result

LONDON, Sept 25 (Reuters) - German debt gained as investors switched to better-rated debt from lower-rated, riskier government debt such as Italy as demand for safe haven assets swelled in the wake of Sunday’s German federal elections.

Germany’s Angela secured a fourth term as chancellor in the vote but was weakened by a surge in support for the far right.

The yield on Germany’s 10-year government bond, the benchmark for the region, edged lower to 0.44 percent in early trade.

Lower-rated Southern European bonds sold off. The Italy-Germany 10-year government bond yield spread was at its widest in 2-1/2 weeks at 168 basis points. (Reporting by Abhinav Ramnarayan; Editing by Saikat Chatterjee)

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