Analysts at Nomura explained that the Italian budget deadline is approaching and tomorrow the Italian government will update its Economy and Finance report. The document – including the latest government macroeconomic projections for the next three years – will be keenly watched as it will also contain fiscal deficit projections for 2019-21. Key Quotes: “Since this government was formed, fiscal deficit estimates have already ranged from 1.6% to above 3%. In our view, the most likely scenario will be a number between 2.0% and 2.5%.” “The report that will be presented by the government tomorrow will be the result of a government meeting that will take place during the day.” “The update to the DEF will not be made immediately available, as it needs to be presented before parliament first, and will most likely be published later on. However, it would be reasonable to expect a press conference following tomorrow’s meeting, during which the government’s members will present the updates to the macro figures included in the document and their new fiscal deficit forecasts.” “The details on which measures will be implemented in the 2019 budget (i.e. flat tax, citizen’s income, pension reforms) will be limited, as it is worth noting that the update to the DEF is less detailed compared with the budget draft. More specific information on the measures to be implemented will be made available with the Budgetary Draft Plan that will be submitted to the EC before 15 October (see Figure 3 for a timeline for the budget). “ “A market-friendly scenario, in our opinion, would be a projected fiscal deficit of ~2%.” “Such a figure would most likely allow for the implementation of 5SM citizens’ income plan, but at the same time respect, the EC Stability and Growth Pact limits without compromising public finances too much further. A number far above or below this poses different risks. As Figure 1 shows, a very high number would increase frictions with the EC and would question the sustainability of Italian debt in the medium term – most of all in a low-growth environment.” “A too low number implies sacrificing part of the government’s reform agenda, and most likely 5SM’s citizens’ income. This would increase friction between the two main parties and between 5SM and Tria, with the risk of either Tria resigning or a coalition breakup. This is more a short-term risk, as ultimately we do not expect 5SM to push the envelope such that the coalition may break up before year-end. One reason for this is that 5SM has lost a lot of ground in the polls and now has an approval rate lower than the League – keep in mind that at the time of the elections 5SM was the first party within the coalition in terms of seats in both houses.” FX Street FX Street FXStreet is the leading independent portal dedicated to the Foreign Exchange (Forex) market. It was launched in 2000 and the portal has always been proud of their unyielding commitment to provide objective and unbiased information, to enable their users to take better and more confident decisions. View All Post By FX Street FXStreet News share Read Next DXY Technical Analysis: The greenback stays bid ahead of FOMC. Focus shifts to 95.00 FX Street 4 years Analysts at Nomura explained that the Italian budget deadline is approaching and tomorrow the Italian government will update its Economy and Finance report. The document - including the latest government macroeconomic projections for the next three years - will be keenly watched as it will also contain fiscal deficit projections for 2019-21. Key Quotes: "Since this government was formed, fiscal deficit estimates have already ranged from 1.6% to above 3%. In our view, the most likely scenario will be a number between 2.0% and 2.5%." "The report that will be presented by the government tomorrow will be the result… Regulated Forex Brokers All Brokers Sponsored Brokers Broker Benefits Min Deposit Score Visit Broker 1 $100T&Cs Apply 0% Commission and No stamp DutyRegulated by US,UK & International StockCopy Successfull Traders 9.8 Visit Site FreeBets Reviews$100Your capital is at risk.2 T&Cs Apply 9.8 Visit Site FreeBets Reviews$100Your capital is at risk.3 Recommended Broker $100T&Cs Apply No deposit or withdrawal feesTrade major forex pairs such as EUR/USD with leverage up to 30:1 and tight spreads of 0.9 pips Low $100 minimum deposit to open a trading account 9 Visit Site FreeBets ReviewsYour capital is at risk.4 T&Cs Apply Visit Site FreeBets ReviewsYour capital is at risk.5 Recommended Broker $0T&Cs Apply Trade gold, silver, and platinum directly against major currenciesUp to 1:500 leverage for forex trading24/5 customer service by phone and email 9 Visit Site FreeBets ReviewsYour capital is at risk.