MILAN: Italian 10-year government bonds closed lower on Tuesday as nervous investors sought shelter in safe-haven assets, with the spread over German Bunds closing at 207 basis points, the highest level since mid-February 2014.
Across global markets, assets seen as low risk such as highly-rated debt, gold and stable currencies like the Japanese yen were in demand, while stocks fell after the United States said it may authorise more strikes on Syria in a move that has escalated tensions with Russia.
Meanwhile North Korean state media warned on Tuesday of a nuclear attack on the United States at any sign of American aggression as a US Navy strike group steamed toward the western Pacific.
Traders also cited book-squaring on Italian bonds ahead of Wednesday's auction.
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