Search ForexCrunch

Italian  stocks bonds declined and bond yields soared yesterday due to growing concerns of the coalition’s fiscal plans, notes the research team at Danske Bank.

Key Quotes

“Giuseppe Conte, a law professor with no political experience, has been chosen as prime minister to head the new an Italian Five Star-League coalition government. He will have a tough job in managing the fractious coalition with a razor-thin majority in the Senate. His first task will be to assemble a cabinet, likely including Five Stars’ Luigi Di Maio as Minister of Labour and Economic Development and Matteo Salvini of the League as Interior Minister.”

“The new cabinet will still require approval by President Mattarella, but in the absence of further hurdles, a new government could go before parliament for a vote of confidence by early next week.”

“Rating agency Fitch already warned  on Monday  that the populist coalition posed a risk to Italy’s credit profile. President Mattarella also expressed concerns about state finances and Italians’ savings, calling for a meeting with parliament leaders today.”