Economics
Currency Vigilantes Ready to Strike Again as Italian Vote Looms
- Traders see euro, not bonds, as best way to play referendum
- Politics is the ‘new economics’ for currency markets: HSBC
Prodi: Italy's Strength Not Dependent on Referendum
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Italy’s constitutional referendum is giving the newly empowered currency vigilantes their latest chance to pounce.
Investors see the euro, not Italian bonds, as the best way to express concern that Prime Minister Matteo Renzi’s reforms will become the latest victim of a rising populist mood. While both assets have fallen in the run-up to the Dec. 4 vote, traders are speculating that the European Central Bank may backstop bonds in the event of a “no” result -- supporting debt markets while further undermining the single currency.