Looks like it won't be an election after all
Italian Prime Minister Giuseppe Conte will have an opportunity to form a new government, according to a senior official cited by Bloomberg.
Conte and the 5-Star Movement have pulled an impressive turnaround after they were ousted last week and the country appeared to be headed to an election. Instead, they've been able to pull together a coalition with the PD.
5-Star leaders insisted on Conte's return but that may mean party leader Di Maio is downgraded so the party can't hold the two top spots. The week ahead may still be bumpy as they try to form a coalition and cabinet but the outlook has certainly improved.
Italian 10-year yields are down 9 bps today compared to about 2bps for the rest of Europe. BTPs are now paying just 1.045% after falling below 1.00% for the first time earlier today.
