Tecass29 May 2018 17:47
* Euro at 11-month low on political turmoil in Italy
* Stocks slump in U.S., Europe, Asia
* Short-term Italian bond yields sees biggest spike in 26 years Markets fear a snap Italian election will be referendum on EU
* Yen, Swiss franc, Treasuries dominate safe-haven rally (Updates through U.S. stock market open; Changes dateline, previous London)
By Trevor Hunnicutt
NEW YORK, May 29 (Reuters) - A spiralling Italian political crisis provoked a global stock market selloff on Tuesday, cut the euro cut to an 11-month low and spiked short-term borrowing costs for the government in Rome.
Investors fear that repeat elections - which now seem inevitable in the euro zone's third-largest economy - may become a de-facto referendum on Italian membership of the currency bloc and the country's role in the European Union.
Safe-haven U.S. Treasury bonds rallied, as did the Japanese yen and the U.S. dollar, but gold was nearly unchanged with spot prices at $1,301.94 an ounce early in U.S. trading after earlier gains.
"As the slide continues, you ask where is the end," said Saxo Bank's head of FX strategy, John Hardy. Global contagion is a risk, he said, with the benchmark U.S. S&P 500 stocks index breaching key "technical" support levels.