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Italian bonds show euro ‘exit’ fears still rumble below the surface

The European Central Bank long ago declared the euro “irreversible.” The two antiestablishment parties looking to form Italy’s next government apparently aren’t convinced. A leaked draft of an agreement between the 5 Star Movement and the League that called for policies that would run up the countries budget deficit and debt load while pressing the European Union to come up with a procedure for allowing countries to leave the eurozone sent Italian stocks and, more important, government bonds skidding on Wednesday. The yield on the 10-year Italian government bond (XTUP:TMBMKIT-10Y=X) jumped more than 15 basis points, according to FactSet, to 2.104%, touching a four-month high.