The growth concerns pushed investors towards Bunds, with 10-year German yields falling to nearly six-week lows.

Yields on 10-year Italian government bonds jumped 10 basis points at the open, reversing some of the gains they had enjoyed in the run-up to the election. That, in turn, pushed up yields on other lower-rated European bonds from Spain and Portugal.

The prospect of prolonged Italian instability drove the euro to six-month lows versus the yen. Against the dollar, it approached seven-week lows hit last week.

The single currency clawed back some of those lossesas the day progressed but Italy continued to overshadow Germany’s progress towards a new government — its Social Democrats on Sunday having decisively backed a coalition with Chancellor Angela Merkel’s conservatives.

“Even though Europe is traditionally driven by the French-German axis, Italy is still hugely important,” Erik Norland, senior economist at CME Group, said.

“To have (Italy) not in favor of deeper integration, anti-immigrant and moving to a different fiscal line from Germany will limit the upside to the euro in the coming days and weeks.”

The dollar too languished near one-week lows against a basket of currencies and was not far off November 2016 lows plumbed versus the yen last week immediately after Trump’s trade threats.

Gold benefited from the turbulence, rising 0.3 percent to one-week lows.

While other commodities could suffer should the growth outlook soften, copper prices stayed flat on the day while crude prices rose half a cent before an oil producers’ meeting that could discuss limiting output further.

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