August 28, 2018 / 7:30 AM / 3 months ago

Italian bond yields hit 3-month high as spending worries mount

LONDON, Aug 28 (Reuters) - Italy’s benchmark 10-year government bond yield hit a three-month high on Tuesday on concerns over the country’s spending policies and ahead of bond auctions later in the week.

Italy’s Deputy Prime Minister Luigi Di Maio told an Italian newspaper that the country’s public deficit could exceed the European Union’s ceiling of 3 percent of gross domestic product next year.

The country is also scheduled to raise 7.5 billion euros in a bond auction on Thursday.

The 10-year yield rose to a three-month high of 3.195 percent in early trades on Tuesday, up nearly 3 basis points on the day.

Five-year borrowing costs were up over 5 bps to 2.47 percent, the highest level since early June. (Reporting by Abhinav Ramnarayan Editing by Jamie McGeever)

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