LONDON: The premium investors demand to hold Italian rather than German government bonds rose above 400 basis points for the first time since early February as doubts about global growth hit peripheral euro zone debt.
The 10-year Italian/German bond yield spread widened to 401 basis points as investors switched out of high yielding Italian debt and into the relative safety of German Bunds.
Peripheral debt has suffered throughout the session as investors have reacted to below-forecast US data released on Friday when European markets were closed.
"Markets are looking at slower global growth and then at those countries with relatively weak competitiveness and that leads you back to the periphery," said Rainer Guntermann, strategist at Commerzbank in London.
"If the world economy slows down... then the peripheral countries will take an even larger hit."
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