The comments revived concerns about Italy's commitment to the euro, a fear that rattled markets last year. Italian 10-year government bond yields, already higher on general risk aversion and concerns about a coming ratings review by Fitch, were up nine basis points at 2.89 percent. Two-year yields were up the same amount at 0.57 percent.
The yield gap over Germany widened 11 bps. "The market generally knows Mr Borghi has these views but I think what he perhaps doesn't understand is how markets function," said Peter Chatwell, head of rates at Mizuho in London. Spanish government bond yields meanwhile pulled back from the day's highs hit after Socialist Prime Minister Pedro Sanchez called a snap election for April 28.
Ten-year Spanish government bond yields were last up around a basis point at 1.25 percent, having touched 1.27 percent. Elsewhere, Germany's benchmark 10-year government bond yield held close to 0.10 percent while other core 10-year yields, were largely flat on the day.