Yields on Italian Bonds Hit 4½ Year High on Budget Concerns

Selloff of Italian bonds and banks revives concerns over the “doom loop” between weak lenders and fragile government finances

Investors continued to sell off Italian government bonds on Monday as the country’s populist government clashed with the European Union over budget targets.

Yields on the country’s 10-year bonds hit a 4½ year high, rising 17 basis points to 3.593%. The two-year bond yield jumped to 1.557% near its highest level since June. Bond yields move inversely to prices.