Jan von Gerich, Research Analyst at Nordea Markets, explains that after the president effectively blocked the formation of a M5S/LN government, Italy is heading to another election in the autumn. Key Quotes “In a new twist to the difficult government formation in Italy, President Mattarella blocked the candidate for the finance minister, Paolo Savona, due to his euro-sceptic views. As the two parties trying to form a government, the anti-establishment Five Star Movement (M5S) and the anti-euro and anti-immigration Lega Nord (LN), insisted on Savona’s nomination, the government formation talks collapsed.” “President Mattarella will now try to form a technocratic government that would guide Italy to new elections late this year or early next one. One task of such a government would be to change the electoral law to make forming majority governments easier. It currently looks unlikely that such a government would be backed by the parliament, which means elections already somewhat earlier in the autumn.” “Considering that President Mattarella prevented a majority government from being formed, while M5S and LN are already doing their most to portray this as Italy being guided by ratings agencies and Germany, the support for M5S and LN could easily only increase in new elections. In fact, the LN is already polling more than five percentage points above their result in the March vote.” “From a market perspective, the centre-right coalition would be a less scary prospect. In fact, Berlusconi has already defended Mattarella’s decision and he would no doubt try to act as a moderating force in a coalition with Salvini.” “Given the stance towards the euro is the single topic financial markets are most sensitive to, the worries towards Italy are probably only starting to increase in the bigger picture.” “As the recent events in Italy at least push the eventual reckoning forward and raise some hopes of an alternative outcome, there will be some relief in financial markets.” “Market worries towards Italy are far from over, and at the latest will pick up again towards the autumn, as the new vote looms. Any short-term relief in Italians markets should thus be seen as an opportunity to build more defensive positions.” 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 WTI: Recovery remains capped below $ 67, output boost concerns weigh FX Street 5 years Jan von Gerich, Research Analyst at Nordea Markets, explains that after the president effectively blocked the formation of a M5S/LN government, Italy is heading to another election in the autumn. Key Quotes "In a new twist to the difficult government formation in Italy, President Mattarella blocked the candidate for the finance minister, Paolo Savona, due to his euro-sceptic views. As the two parties trying to form a government, the anti-establishment Five Star Movement (M5S) and the anti-euro and anti-immigration Lega Nord (LN), insisted on Savona's nomination, the government formation talks collapsed." "President Mattarella will now try to form a technocratic… 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.