LONDON, May 29 (Reuters) - The cost of insuring exposure to Italy’s sovereign debt soared to a 4-1/2 year high on Tuesday as the country prepared for fresh elections that are likely to be fought over Italy’s role in the European Union and the euro zone.
Italian 5-year credit default swaps (CDS) jumped 49 basis points (BPS) from Monday close to 225 bps, according to data from IHS Markit.
The CDS traded at 122 bps at the start of last week.
Investors were also spooked about the prospect of spillover into other euro zone periphery countries, pushing Portugal’s 5-year CDS 15 bps higher on the day to the highest in nearly 7 months.
CDS in Spain rose 2 bps to their highest in 13 months. (Reporting by Karin Strohecker; editing by Sujata Rao)