Spanish and Italian debt insurance costs crept slightly higher in early trading Wednesday as investors remain cautious on how the second Greek rescue package will impact the rest of the euro zone.

At around 0830 GMT, Spain's five-year credit default swap was two basis points wider at 367 basis points, while Italy's advanced four basis points to 384 basis points, according to data-provider Markit.

Credit default swaps are derivatives that function like a default insurance contract for debt. If a borrower defaults, sellers compensate buyers.

Spain's default protection costs were seen higher after reports from Spanish newspaper El Pais said the country will ask the European Commission to lower its 2012 budget deficit target to just over 5% instead of the 4.4% initially planned, citing unidentified government sources.

Meanwhile, Portugal's CDS was unchanged at 33 percentage points upfront as concerns still linger on whether it may use Greece as a template for writing down its debt.

Quoting CDS prices upfront is a convention reserved for particularly risky investments.

This means protection against a Portuguese default costs $3.3 million at inception, plus $100,000 a year, to cover $10 million of debt for five years.

In the core euro-zone nations, France's CDS was unchanged at 178 basis points, while Germany's were one basis point tighter at 80 basis points.