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Analysts at TD Securities point out that Italian headlines have been all over the map with promises the budget would be released on time, rumours offered and denied that FinMin Tria had offered to resign, and on again, off again discussions.

Key Quotes

“Both Salvini and Di Maio have seemingly agreed to support a deficit target for 2019 of 2.4%, rather than the number rumoured closer to 1.6% that Finance Minister Tria planned to unveil today. There are currently low level discussions taking place to try and sort out differences, with PM Conte, Tria, Di Maio, and Salvini scheduled to meet with the President at 10am ET, and potentially a cabinet meeting at 2pm ET. So far, it looks doubtful the budget will be unveiled as planned shortly after the European market close. There would likely need to be some more stretched assumptions on areas like privatization receipts to come close to meeting everyone’s demands.”