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The news is crossing wires via Reuters that the Italian government has set a  budget deficit target of 2.6 percent of gross domestic product (GDP) for the next three years, defying the EU and  economy minister Giovanni Tria, who wanted the deficit as low as  1.6 percent next year.

Tria did not immediately comment, but Di Maio and other government officials said he had no intention of resigning, according to Reuters.  

A higher budget deficit target might rattle the Italian bond market, leading to a sharp rise in the spread between the 10-year Italian government bond yield and its German counterpart.