Italian equities and bonds have sold off in morning trading today, with contagion spreading across European markets, as fears of a snap election as early as August intensified.
Investors were spooked by an intervention from Italian President Sergio Mattarella at the weekend to prevent the formation of a government by populist Eurosceptic parties Five Star Movement and the League. The pair performed well in the March election but the resulting hung parliament has meant the EU's fourth largest economy has been without a government since then. Fears over further political upheaval in the country sent yields on two-year Italian bonds soaring to as high as 2.83% on Tuesday morning (29 May) from 0.9% when markets opened, after being in negative territory for the m...
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