- Political uncertainty in Italy over the past couple or weeks has fed the rout in government bonds for the EU peripheral countries (namely Italy, Spain to an extent), but growing calls to remove Spanish PM Mariano Rajoy are doing the trick today.
- At issue are the corruption-related convictions of a number of former officials of Rajoy's ruling party. The centrist Ciudadanos party today indicated it will back a no-confidence vote in Rajoy unless he calls a snap election.
- "Rajoy’s chances of completing his term are minimal, it’s a matter of timing now,” says Oxford Economics' Angel Talvera.
- Most of Europe is in the green, but Spain's IBEX 35 has tumbled 2% and Italy's MIB 1%. Government bond yields are lower in Germany and the U.K., but Spain's 10-year yield is up 7 basis points to 1.47%, and Italy's 7.5 basis points to 2.476%.
- ETFs: EWP, EWI, HEWI, HEWP, DBSP, DBIT, FLIY
- Now read: Short And Sharp: Italian Risk Takes Center Stage... Again
Original article