Italian Prime Minister-designate Enrico Letta says this is the moment where Europe can change course on austerity.
Letta began negotiations to form a government today and believes things are improving.
“He told us that as the hours pass, he feels things are improving, whereas at the start he felt desperate,” said Massimo Bitonci, an opposition lawmaker who held talks with him.
Italian 10-year yields are up 5 bps today but still on track for the lowest weekly close since 2010. Seems as though the bond market either a) Doesn’t believe Letta will be able to form a government, b) Doesn’t think he will meaningfully cut back on austerity or, c) Is excited about more growth and less austerity (doubtful).
