Italy: Economy under stress – Danske Bank

The Italian government released its new fiscal strategy, which probably left investors with more questions than before, according to analysts at Danske Bank.

Key Quotes

“Political tensions between the European Commission and Italy are growing as Deputy PM Di Maio dismissed concerns on Sunday that the current budget pointed to a significant deviation from the agreed fiscal path.”

“The current stand-off between Italy and the Commission has led to renewed pressure on Italian government bond yields as well as the Italian equity market. The next focal point for markets will be 15 October, which is the deadline for the budget draft to be presented to Brussels, and our base case is now that the Commission will give a negative opinion on the Italian budget.”