A furious global hunt for yield has helped to spark a significant repricing of fixed-income markets.

The consequences of last week's major market moves were by turns high-profile and obscure; one oxymoron-inclined senior White House advisor to President Donald Trump insisted the inverted curve that appeared briefly in U.S. Treasury yields was in fact "flat," while the Austrian 100-year bond continued to trade at more than twice its face value.

But only the most charitable investor would argue there were many fundamental factors behind the downward march of potential borrowing costs for Italy's troubled government.

Last March, a national election yielded no outright political winner in Rome, but sizeable and unprecedented vote shares for anti-immigrant and anti-establishment parties immediately prompted hand-wringing among investors in the world's eighth largest economy.

Those two political groupings, known as Lega and the Five Star Movement (M5S), eventually struck a deal to form an unlikely coalition government. But their combined campaign promises of higher spending and lower taxes frightened both the market and the European Commission, which has closely monitored the Italian economy and its expensively-serviced debt pile since the euro zone crisis.

This fear has continued to mean that "I Buoni del Tesoro Poliennali" — the Italian name for multi-year government bonds, typically shortened to BTPs — have frequently ended up as the whipping boys of Europe's sovereign credit markets.

And as the coalition crumbles further this week, potentially transitioning from confrontational inaction to outright collapse with a no-confidence vote in parliament widely mooted, Italian politics enters its latest crisis chapter thanks to these unnatural bedfellows.

Originally a separatist movement that sought to build a new nationalist and pro-business economy from the rump of Italy's northern industrial heartland, Lega only recently switched from criticizing southern Italians to targeting immigrants.

Meanwhile, M5S won many of its early adherents during the financial crisis and for years has railed against government austerity and low unemployment, winning much of its support in the impoverished south.