LONDON, July 30 (Reuters) - Italy’s 10-year bond yield hit a four-week high and the spread over Germany widened on Monday, ahead of a key auction of new benchmark 10-year bonds amid political tensions in the euro zone’s third largest economy.
Italy is set to sell debt via auctions later on Monday, including a new 10-year benchmark bond.
Ahead of this, the yield on Italy’s existing benchmark 10-year bond rose 3 basis points to a four-week high of 2.77 percent.
The closely watched Italy/Germany spread stretched to at 237 bps, its widest since July 12 .
On Friday, the founder of Italy’s ruling party 5-Star Movement said the country should have a “plan B” to quit the euro zone if economic conditions dictated it, remarks that are likely to fuel new doubts on Italy’s intention to maintain the single currency. (Reporting by Abhinav Ramnarayan Editing by Jamie McGeever)