LONDON, June 9 (Reuters) - Italian government bond yields fell on Friday after the head of the country's ruling Democratic Party, Matteo Renzi, said he was pessimistic over the chances of reaching a new cross-party pact on a reform of the electoral law.
His comments came a day after a deal between Italy's top four parties unravelled in parliament, sparking a scaling back of expectations for early elections in the euro zone's third biggest economy.
Italy's 10-year government bond yield fell as much as 5 basis points to 2.097 percent, its lowest level in almost two weeks. That followed a slide of around 12 basis points on Thursday. (Reporting by Dhara Ranasinghe; Editing by John Geddie)