The election to the Colle and the possible passage of Draghi from Chigi to the Quirinale
While in Rome blank ballots prevail in the first vote for the President of the Republic, on the secondary market, at the end of the day, the spread BTP-Bund is slightly up to 145 basis points. What are investors considering?
“At the moment the markets are in a phase of waiting, as we are still in a preliminary phase of the election of the next President of the Republic”.
How is the scenario of a change at Palazzo Chigi seen with a passage by Mario Draghi to the Quirinale?
“We believe it spread However, BTP-Bund will be in the spotlight throughout the year. In the event of Mario Draghi remaining as Prime Minister, we believe that it is spread can remain stable in a range between 120-150. With Draghi at the Quirinale and the appointment of a prime minister faithful to his political line, we expect one spread slightly larger in the short term, between 130-160 basis points “.
What do big investors want: whether Draghi will remain prime minister or not?
“Investors prefer any scenario that contemplates Mario Draghi within the Italian political scene: otherwise, the differential on the Italian and German 10-year yields could rise even above 200 basis points. An increase that would however be contained by the shield protection of the ECB (through the plans Pepp And App). In a scenario of Italian political instability, we believe that tensions would remain high. In March, after the plan expires Pepp the ECB’s purchases of government bonds will decrease and the ECB’s protective shield will therefore be less powerful. In the event that Draghi’s reputation no longer exists to support the rating Italian credit, lo spread it could rise significantly and approach the highs of November 2018, when it reached 325 basis points. In this scenario ours range is between 200-320 basis points “.
What are the risks that are seen if Draghi were to collect Mattarella’s legacy? Would a technical figure like the Economy Minister Daniele Franco reassure them?
“The risks of the Draghi scenario at the Quirinale are related to the consequent choice of the Prime Minister. A solution of continuity to Draghi’s policies would involve the absence of risks. Discontinuity solutions in open contrast with the policies carried out by the former ECB banker especially with regard to the Pnrr, they would have negative consequences on the markets. The worst case still remains a breakdown of the majority of the government. therefore seen as a favorable solution for the markets “.
@andreadeugeni
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– Farinetti (Eataly) to Affaritaliani.it: “Draghi go to the Quirinale. We would lock him up for 7 years. The former ECB a guarantee, the parties carry out the electoral reform”
– No thrills for the Quirinale, spreads without jolts. And Mediobanca and Intesa bless Draghi al Colle
– Draghi, The Economist rejects Super-Mario’s move to the Quirinale
#Markets #Draghi #Colle #Chigi #Franco #premier #spread