Italy Has Something to Hide

5

Italy will not publish preliminary GDP figures for Q3. The euro-zone’s third largest economy will release only final numbers on December 21st, when markets dwindle down towards Christmas. 

Why? They need to make a “series of revisions” for previous quarters. Will these revisions be to the downside? If so, the result for the third quarter could actually look better, as it will come on top of lower GDP in previous quarters.

But in any case of lower GDP numbers in earlier quarters or contraction in Q3 (as expected), Italy’s debt to GDP ratio will rise, and this is something you don’t want to tell the markets right now.

Italy’s 10 year bond yields are flirting with the “bailout barrier” level of 7% once again. Recent auctions have shown that the levels in the secondary markets turn into high prices that Italy pays in the  primary markets – in bond auctions.

This report joins bad news coming from one of Italy’s largest banks, Unicredit. The bank is reportedly in negotiations with the ECB over easier access to funding.

The new government of Mario Monti, whether it consists only of technocrats or if it includes politicians, will have a very hard task to restore confidence.

Further reading: Spain’s Rajoy negotiated 100 billion euros of aid with Merkel

Get the 5 most predictable currency pairs

About Author

Yohay Elam – Founder, Writer and Editor I have been into forex trading for over 5 years, and I share the experience that I have and the knowledge that I’ve accumulated. After taking a short course about forex. Like many forex traders, I’ve earned the significant share of my knowledge the hard way. Macroeconomics, the impact of news on the ever-moving currency markets and trading psychology have always fascinated me. Before founding Forex Crunch, I’ve worked as a programmer in various hi-tech companies. I have a B. Sc. in Computer Science from Ben Gurion University. Given this background, forex software has a relatively bigger share in the posts.

5 Comments

  1. Pingback: Italy Has Something to Hide | Forex news

  2. This whole Italy thing is really something EU should worry about. Like they say, the Greece is nothing compared to Italy and this can have major trouble for EU

  3. Pingback: EUR/USD Outlook November 14-18 | Forex Crunch

  4. Pingback: Euro to Crash When German Yields Join the Party | Forex Crunch

  5. Pingback: EUR/USD Outlook November 21-25 | Forex Crunch