Tiny Murcia was on course on Sunday to be the second Spanish region to request help from the central government to keep it afloat, as media reported half a dozen local authorities were ready to follow in the footsteps of Valencia.
Ten-year government bond yields rose as high as 7.55 percent, up 28 basis points on the day. Shorter-dated bonds came under heavier pressure, further flattening the country's bond yield curve.
Five-year yields hit a euro-era high of 7.33 percent, up 47 bps on the day, and two year yields jumped 66 bps to 6.42 percent. The yield spread between 10- and 2-year Spanish bonds was at its narrowest since December 2011.
Italian 10-year government bond yields surpassed their Irish counterparts in intra-day trading for the first time since January 2009. Italian yields were 16 bps higher at 6.37 percent. Ireland is one of the euro zone countries receiving international aid.