Italy: Governing coalition formed – Danske Bank

Danske Bank analysts note that Italy's President Matarella tasked Prime Minister Conte to form a new governing coalition between the Five Star Movement and the centre-left Democratic party.

Key Quotes

“The deal reduces the risk of another budget clash with Brussels over the 2020 budget and rating downgrades. Italian yields cheered the avoidance of snap elections with the 10Y yield breaking below 1% for the first time ever. A final hurdle still needs to be cleared by getting support for the tie-up amid Five Star members in an online vote.”