LONDON (Reuters) – Italian government bond yields rose on Tuesday after euro zone finance ministers called on Italy to change its budget, while broader euro zone bond markets hardly budged ahead of key U.S. congressional elections.

Monday’s Eurogroup meeting did little to ease the standoff between Italy and the European Union over the 2019 Italian budget, and reignited concerns that Italy’s expansionist budget was a threat to the euro system.

French Finance Minister Bruno Le Maire said that the common currency was at stake, reflecting earlier concerns that Italy’s violation of EU fiscal rules could bring about another euro zone crisis.

But the sell-off in Italian government bonds was largely contained by the lack of any new information, analysts said.

“Italy has signaled it won’t budge on its plans, which would point to further intensification of this standoff,” said ING rates strategist Benjamin Schroeder.

Italian government bond yields were 2-3 basis points higher on the day IT2YT=RR IT10YT=RR, underperforming their euro zone peers.

Euro zone finance ministers called on Italy to change its 2019 budget before a deadline set for next week to conform with European Union rules, but Rome dug in its heels saying its disputed deficit plan would not change.

An earlier draft was rejected because it envisages a 0.6 percent of GDP increase in Italy’s structural deficit next year rather than the reduction required by EU rules.

Italy’s 10-year bond yield rose as high as 3.36 percent, pushing out the gap over German Bund yields DE10YT=RR to 292 bps from 289 bps late Monday. DE10IT10=RR.

ING’s Schroeder said that Italian bond or BTP prices were supported by speculation that the European Central Bank would offer cheap loans to Italian banks under its targeted longer-term refinancing operations (TLTROs).

However, Jan Smets, governor of the National Bank of Belgium, downplayed this suggestion in an interview with CNBC on Monday.

Elsewhere, most euro zone government bond yields were largely steady ahead of key U.S. midterm elections.

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Germany’s 10-year bond yield, the benchmark for the region, held at 0.43 percent, up one basis point on the day DE10YT=RR, while French 10-year government bond yields were also up one basis point at 0.80 percent FR10YT=RR.

Opinion polls suggest Democrats will likely take control of the House of Representatives, while Republicans should hold their Senate majority.

“There is some uncertainty premium baked into the market as if Trump’s ability to implement legislation is curtailed, there could be waning fiscal stimulus, and higher risk of a government shut down, so some sort of mild risk off could be argued,” said ING’s Schroeder.

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