LONDON, Nov 20 (Reuters) - Italy’s government bond yields hit one-month highs on Tuesday on signs of heightened tensions between the Italian government and the European Union over its 2019 budget. A solution with the European Commission over Italy’s budget can be found but the main measures contained in it must not be touched, Deputy Prime Minister Luigi Di Maio said on Tuesday, adding that Italy was paying the consequences of the EU being a “stonewall” over the budget.
Weakness in banking stocks and broader European stock markets added to the selling in riskier Italian bonds.
Italian government bond yields rose as much as 13 basis points, five-year yields rising to 2.97 percent, and its 10-year yield rising to 3.70 percent,
The moved pushed the Italy/Germany 10-year bond yield gap to a one-month wide of 333 basis points, up from 322 basis points late on Monday. (Reporting by Virginia Furness; Editing by Dhara Ranasinghe)