LONDON, May 22 (Reuters) - Italy’s 10-year government bond yield hit its highest level in over a year on Tuesday as political uncertainty continued to hurt investor sentiment towards the euro zone’s third largest economy.
Italy’s anti-establishment 5-Star Movement and the far-right League on Monday proposed Giuseppe Conte, a little-known law professor, as prime minister to lead a coalition government, which many fear will implement high-spending policies and raise the country’s debt levels.
The yield on Italy’s 10-year government bond rose 8 basis points in early trade to hit a 14-month high of 2.418 percent.
The closely-watched Italy/Germany 10-year bond yield spread hit 189.6 bps, the widest since June 2017. (Reporting by Abhinav Ramnarayan; editing by Sujata Rao)