{"id":35001,"date":"2018-06-11T08:13:03","date_gmt":"2018-06-11T13:13:03","guid":{"rendered":"http:\/\/olduvai.ca\/?p=35001"},"modified":"2018-06-11T08:13:03","modified_gmt":"2018-06-11T13:13:03","slug":"italian-politics-the-calm-before-the-next-storm","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=35001","title":{"rendered":"Italian Politics: The Calm Before the Next Storm"},"content":{"rendered":"<div id=\"cb-featured-image\" class=\"cb-fis cb-fis-fs cb-fis-big cb-fis-block-parallax clearfix\">\n<div class=\"cb-entry-header hentry cb-meta clearfix\">\n<h3 class=\"entry-title cb-entry-title entry-title cb-title\"><a href=\"https:\/\/grizzle.com\/italian-politics-calm-before-storm\/\">ITALIAN POLITICS: THE CALM BEFORE THE NEXT STORM<\/a><\/h3>\n<\/div>\n<p><img decoding=\"async\" class=\"cb-image\" src=\"https:\/\/grizzle.com\/wp-content\/uploads\/2018\/04\/italy-calm-before-the-next-storm-2.jpg\" alt=\"\" \/><\/p>\n<\/div>\n<div class=\"cb-post-wrap cb-wrap-pad wrap clearfix cb-sidebar-none cb-sidebar-none-narrow cb-embed-fs\">\n<div class=\"cb-main clearfix\">\n<article id=\"post-6330\" class=\"clearfix post-6330 post type-post status-publish format-standard has-post-thumbnail category-global-strategy tag-ecb tag-emf tag-euro tag-eurozone tag-fiscal-integration tag-italy\">\n<section class=\"cb-entry-content clearfix\">Europe remains a potential source of angst for financial markets in the form of another existential crisis for the Eurozone. True, stock markets have relaxed over the past week in part because of relief that another <a href=\"https:\/\/grizzle.com\/italy-populism-eurozone\/\">Italian election<\/a> has been avoided for now and in part because US dollar upward momentum has stalled (see following chart).<strong>US DOLLAR INDEX<\/strong><\/p>\n<div id=\"attachment_6329\" class=\"wp-caption aligncenter\">\n<p><img loading=\"lazy\" decoding=\"async\" class=\"size-full wp-image-6329\" src=\"https:\/\/grizzle.com\/wp-content\/uploads\/2018\/04\/US-Dollar-Index-Jun-2018.png\" sizes=\"auto, (max-width: 799px) 100vw, 799px\" srcset=\"https:\/\/grizzle.com\/wp-content\/uploads\/2018\/04\/US-Dollar-Index-Jun-2018.png 799w, https:\/\/grizzle.com\/wp-content\/uploads\/2018\/04\/US-Dollar-Index-Jun-2018-300x201.png 300w, https:\/\/grizzle.com\/wp-content\/uploads\/2018\/04\/US-Dollar-Index-Jun-2018-768x514.png 768w, https:\/\/grizzle.com\/wp-content\/uploads\/2018\/04\/US-Dollar-Index-Jun-2018-360x240.png 360w\" alt=\"US Dollar Index - June 2018\" width=\"799\" height=\"535\" \/><\/p>\n<p class=\"wp-caption-text\">Source: Bloomberg<\/p>\n<\/div>\n<p><strong>CONFLICT IN ITALY \u2014 WHEN WILL IT COME TO A BOIL?<\/strong><\/p>\n<div class=\"su-pullquote su-pullquote-align-right font-size:12px\">The coalition government\u2019s economic policies will likely conflict with the fiscal rules set by Brussels.<\/div>\n<p>On Italy this is likely just the calm before the next storm given the Five Star and League coalition government\u2019s economic policies are almost inevitably going to be in conflict with the fiscal rules set by Brussels \u2014 though the confrontation may take longer to come to a boil because of the presence of technocrats in the new government, a compromise required by Italian president Sergio Mattarella for the government to be formed on June 1.<\/p>\n<p>There will also doubtless be hopes on the part of the political establishment that the differences in ideologies between the left of centre Five Star and the right-wing League will become evident in the everyday practice of trying to run a government resulting in due course in both \u2018populist\u2019 parties being discredited in the eyes of the electorate.<\/p>\n<h4>ITALIAN 10-YEAR GOVERNMENT BOND YIELD AND SPREAD OVER 10Y GERMAN BUND YIELD<\/h4>\n<div id=\"attachment_6328\" class=\"wp-caption aligncenter\">\n<p><img loading=\"lazy\" decoding=\"async\" class=\"size-full wp-image-6328\" src=\"https:\/\/grizzle.com\/wp-content\/uploads\/2018\/04\/Italian-10Y-government-bond-yield-and-spread-over-10Y-German-bund-yield.png\" sizes=\"auto, (max-width: 800px) 100vw, 800px\" srcset=\"https:\/\/grizzle.com\/wp-content\/uploads\/2018\/04\/Italian-10Y-government-bond-yield-and-spread-over-10Y-German-bund-yield.png 800w, https:\/\/grizzle.com\/wp-content\/uploads\/2018\/04\/Italian-10Y-government-bond-yield-and-spread-over-10Y-German-bund-yield-300x200.png 300w, https:\/\/grizzle.com\/wp-content\/uploads\/2018\/04\/Italian-10Y-government-bond-yield-and-spread-over-10Y-German-bund-yield-768x513.png 768w, https:\/\/grizzle.com\/wp-content\/uploads\/2018\/04\/Italian-10Y-government-bond-yield-and-spread-over-10Y-German-bund-yield-360x240.png 360w\" alt=\"Italian 10Y government bond yield and spread over 10Y German Bund Yield\" width=\"800\" height=\"534\" \/><\/p>\n<p class=\"wp-caption-text\">Source: Bloomberg<\/p>\n<\/div>\n<p><strong>THE ECB AND THE EUROSYSTEM\u00a0\u2014 ITALY\u2019S GREATEST CREDITOR<\/strong><\/p>\n<p>The other point to consider with an Italian populist government now in place is how the ECB will react in terms of the signals sent given that the ECB and the Eurosystem is the single largest holder of Italian government debt.<\/p>\n<p>\u2026click on the above link to read the rest of the article\u2026<\/p>\n<\/section>\n<\/article>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>ITALIAN POLITICS: THE CALM BEFORE THE NEXT STORM Europe remains a potential source of angst for financial markets in the form of another existential crisis for the Eurozone. True, stock markets have relaxed over the past week in part because of relief that another Italian election has been avoided for now and in part because [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[18209,281,285,1849,18208,1464,2443],"class_list":["post-35001","post","type-post","status-publish","format-standard","hentry","category-economics","tag-christopher-wood","tag-europe","tag-eurozone","tag-financial-markets","tag-grizzle","tag-italy","tag-stock-markets"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/35001","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=35001"}],"version-history":[{"count":2,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/35001\/revisions"}],"predecessor-version":[{"id":35003,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/35001\/revisions\/35003"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=35001"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=35001"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=35001"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}