October 16, 2018 / 7:43 AM / 10 months ago

Rise in Italy's bond yields is "temporary", says deputy PM

ROME, Oct 16 (Reuters) - The widening of the difference, or “spread” between Italian government bond yields and equivalent German paper is a “temporary” situation, Italy’s Deputy Prime Minister Luigi Di Maio said on Tuesday.

Italian bond yields rose across the board last week after the anti-establishment government presented a deficit-hiking budget plan, likely to set up a showdown with Brussels.

“The situation with the spread is temporary .. it (the spread) will start going down because the budget law will be explained... you’ll see that the problem over the spread will not exist any more,” Di Maio said in a radio interview with Radio Radicale.

On Tuesday the closely watched Italy/Germany 10-year bond yield spread tightened 11 basis points to 297 bps, moving further away from a five-year peak of around 315 bps hit last week. IT10YT=RR, DE10YT=RR. (Reporting by Giulia Segreti)

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