Italian BTPs were the main reason for Eurozone bonds to fall on Monday, following the triumph of a right-wing group that is headed by Giorgia Meloni, who won an overwhelming majority in Italy’s parliament elections.
The results leave his Brothers of Italy party as the biggest party in both the Senate as well as that of the Chamber of Deputies. Therefore, in the coming Italian government will likely be headed by a group who has shown a willingness to sympathize in the past with Fascist policies of the former president Benito Mussolini.
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Meloni has moderated her remarks during the campaign and stated that she would continue with the economic policies demanded from the European Union to unlock tens of billions of euros in post-pandemic assistance which will be needed for the rebuilding of the country’s economy.
Its yield for the standard Italian 10 year bond jumped twelve basis points and reached 4.48% at the time of writing however, that of the two-year yield on the note – which is a more direct indication of the imminent pressures in Eurozone market debt – increased just 10 basis points to 3.13 percent.
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While the change was quite sharp but it occurred in the midst of general apprehension in bond markets over the possibility of European policy breaking due to the energy crisis that is currently raging. The German 10-year yield also increased seven basis points higher up to 2.10%, and that of the 2 year note yield increased 5 basis points , bringing it to 1.96 percent.
Italian stocks, however they were pleased with the outcome and are hopeful of a pro-business plan from the next government. The MIB index jumped 0.2 percent which makes it the second highest index in Europe.
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