Exchange traded funds that invest in Italian stocks and government debt were under heavy selling pressure again Monday after steep declines late last week.

The iShares MSCI Italy (NYSEArca: EWI) was down nearly 6% in midday trading as the so-called bond vigilantes trained their sights on Italy and Spain. Government bond yields soared in the two Eurozone countries as the credit upheaval spreads from Greece. [Spotlight: Italy ETF]

Italian and Spanish bond yield spreads over German bunds jumped Monday to their widest levels since the inception of the euro, Dow Jones Newswires reported. There is a significant risk of Spain and Italy “being engulfed by the crisis,” a fixed-income strategist told the newswire service.

PowerShares DB 3x Italian Treasury Bond Futures ETN (NYSEArca: ITLT) was down more than 10% on Monday while PowerShares DB Italian Treasury Bond Futures ETN (NYSEArca: ITLY) also traded lower. [Sovereign Bond ETNs]

The exchange traded notes give investors leveraged or unleveraged exposure to the performance of an Italian bond futures index.

Markets in Spain were also under duress Monday — iShares MSCI Spain (NYSEArca: EWP) was down over 4%. [Spotlight: Spain ETF]