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In Italy: Digestif

Relief. Fleeting, maybe. But relief nonetheless.

Well, as illiquid markets are prone to do, BTPs are rallying hard on Wednesday as traders desperately try to determine whether Tuesday's panicked, fire sale was a buying opportunity or a harbinger of something even worse. Italian bonds were higher out of the opening gate with some folks citing a more conciliatory stance by Five Star's Di Maio, who apparently will not form an electoral alliance with the recalcitrant League, whose Matteo Salvini said the following today about the prospect of trying to salvage the coalition government by reconciling with President Mattarella: Di Maio’s overture? We’re not at the market and it’s also a question of dignity. Di Maio would later say he intends for Five Star to form a government alone after the elections. So that's actually "good" news as far as Italy's populists go. Recall the following from Barclays: Whether L and 5SM decide to join forces ahead of the next election is likely to heavily influence the rhetoric of the electoral campaign and potentially the significance of the next electoral appointment in Italy, and with that, market sentiment. If the two anti-establishment forces were to team up, they might decide to adopt a
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1 comment on “In Italy: Digestif

  1. […] and Italian equities bounced back early on and news that Five Star is backtracking on Savona buoyed sentiment further. Here’s […]

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