Listen, Italian Finance Minister (and man who is not Paolo Savona), Giovanni Tria, knows juuust what everyone wants to hear right now, ok?
Italian assets were coming off another rough week, with bonds and equities having mostly faded the relief rally that unfolded after new elections were averted and lest things should spiral completely out of control just as the ECB tips the end of APP, Tria gave an interview to Corriere della Sera that was clearly designed to calm markets.
You can read the whole thing for yourself here, but the first two bullet points pretty much sum up the message:
Tria: «Government committed to the euro. Public debt will fall».
The Economy minister: «The government position is clear and unanimous. There is no discussion about leaving the euro. «If we used miniBots, we would solve nothing – we will pay suppliers on time and in cash»
Looks like someone knew what script he needed to stick to in order to get things off on the right foot this week.
2Y yields in Italy fell a truly hilarious ~55bps on Monday in a testament to how manic things still are at the Italian front end:
10Y yields plunged 20bps and the BTP-Bund spread tightened more than 30bps, a welcome reprieve from last week when it looked like “lo spread” was on the way back to the multi-year highs hit a couple of weeks ago when BTPs were basically no-bid.
As for Italian stocks, they’re having a great day:
The banks are surging and for their part, Jefferies says that while “heightened uncertainty may justify a higher cost of equity, the extent of discount at Italian banks vs Euro peers is already substantial.”
And when you think about today’s 4-ish % rally in the FTSE Italia All-Share Banks, do try to keep it in context, ok?