LONDON, Nov 12 (Reuters) - Italian government bond yields extended their rise on Monday, with traders citing a report that Italy’s parliament budget watchdog sees a higher-than-forecast 2.6 percent budget deficit in 2019 as a reason behind the bond selloff.
Analysts added that nervousness before Tuesday’s deadline for Italy to resubmit its budget plan for 2019 to the European Commission was also weighing on the market.
Italian bond yields were last up 5-9 basis points on the day across the curve, with two-year bond yields touching almost 1.29 percent.
The 10-year Italian/German bond yield gap pushed out to 306 bps - its widest in almost two weeks. (Reporting by Dhara Ranasinghe; Editing by Saikat Chatterjee)