Irish bond yields rose today, pushing the gap over German peers to its widest in three weeks, as unease crept in ahead of the looming UK referendum on membership of the European Union.
Ireland could be in the firing line should Britain, one of our biggest trading partners, vote to leave the EU on June 23.
Analysts say that so far bond markets in Ireland and the broader euro zone have shown a degree of complacency towards Brexit risks but that could change with the vote just three weeks away.
There were some signs of jitters moving in today, with Ireland's 10-year bond yield rising more than 2 basis points to 0.83%.
It underperformed other euro zone bond yields, which were broadly steady ahead of closely-watched US non-farm payrolls data later in the day.
The yield gap - or spread - between Irish bonds and top-rated German Bunds was at 69 basis points, its widest level in about three weeks and up from about 50 basis points at the start of the year.
Deutsche Bank has described Brexit as the single biggest source of uncertainty facing the Irish economy in the near term.
Ratings agency Moody's, which upgraded Ireland's credit rating last month, said a British exit from the European Union would have a negative impact on Ireland due to the countries' close economic ties.
As the referendum approaches, both sides are stepping up their campaigns to try to win over undecided voters and break the deadlock in opinion polls which suggest that Britons are almost equally split over which way to vote.
Elsewhere, euro zone bond yields were broadly steady a day after falling as the European Central Bank only tentatively upgraded its forecast for future inflation.
This reinforcedg expectations that its ultra-easy monetary policy would remain in place for some time.
