Given the weakness in European equity benchmark indices in the wake of the Italian elections yesterday, it is not surprising to see that spreads of sovereign 10-year debt relative to Germany have also widened out. Since last Friday alone, spreads on Italian debt have widened out by 45 basis points (bps) to 333 bps, which is the highest level since last December. In Spain, spreads have also widened out but not to the same degree. Relative to last Friday's close, spreads on Spanish debt have widened out by 21 bps to 377 bps. As shown in the second chart below, though, spreads in Spain were last at these levels just two weeks ago.