Italian Bond Yields Rise Ahead of Key Parliamentary Election By Investing.com
Economy 46 minutes ago (Sep 23, 2022 07:27AM ET)
By Scott Kanowsky
Investing.com — Yields on Italian debt rose on Friday ahead of a watershed election that, according to the latest polls, may see a new far-right coalition take power in both houses of parliament in Rome.
As of 10:37 GMT (06:37 EST), the yield on the benchmark Italy 10-Year had jumped to 4.277% after it closed the previous day at 4.191%. The Italy 2-Year has also touched as high as 3.038% in Friday trading. Bond prices typically fall as yields increase.
Campaigning before Sunday’s vote is now in its final stages, with polling group Termometro Politico suggesting that many Italians will give their support to one of the country’s most right-wing governments since World War II.
At its helm is predicted to be Giorgia Meloni, the firebrand president of the nationalist ‘Brothers of Italy’ party, which is expected to garner 25.2% of the vote. The bloc would also include populist leader Matteo Salvini’s ‘League’ and former prime minister Silvio Berlusconi’s ‘Forza Italia’ parties.
Meloni has vowed to place stricter curbs on immigration and slash taxes. She has also promised to widely adhere to EU budget policies to ensure that Italy receives crucial tranches of a EUR200B aid package from Brussels.
However, analysts have expressed concerns that the coalition’s likely members may not follow these rules, which were crafted by outgoing prime minister Mario Draghi in order to secure the funding.
Rome will need to meet 55 new policy targets in order to receive the next round of payments in December. Without the funds, the expected coalition could struggle to revive growth, especially in an environment of sharply rising interest rates that increase the cost of servicing Italy’s huge debt burden. Debt in relation to gross domestic product in the country has ballooned to 151% and may grow even further without the EU’s cash injections.
Despite her pledge to stick to Draghi’s stated reform criteria, Meloni has previously suggested that she could call for revisions to the EU aid program, citing a recent spike in oil prices. Analysts at Teneo noted that while a Meloni government is unlikely to butt heads with Brussels, its plans for the Italian economy will create “some friction” with the EU.
Italian Bond Yields Rise Ahead of Key Parliamentary Election
LONDON (Reuters) – Global government bond losses are on course for the worst year since 1949, and this year’s bond crash threatens credit events and a liquidation of the world’s…
By Jonathan Cable LONDON (Reuters) – A downturn in business activity across the euro zone deepened in September, according to a survey which showed the economy was likely entering…
(Reuters) – Investors withdrew money from global bond and equity funds in the week ended September 21, with caution creeping in ahead of the U.S. Federal Reserve meeting in which…
(C) 2007-2022 Fusion Media Limited. All Rights Reserved.
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.