A Fresh Bout of Italian Political Risk Puts Investors on Edge
- Di Maio’s resignation boosts odds of firebrand Salvini return
- Goldman Sachs still sees coalition government through 2020
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The prospect of a comeback for the populist Italian firebrand Matteo Salvini was hanging over markets on Wednesday after a key political rival stepped down, raising the chances of an early election that could pave the way for him to pursue his euroskeptic agenda.
The resignation of Luigi Di Maio as leader of the Five Star Movement has unsettled investors wary of another standoff between Italy and the European Union. Bonds fell as much as eight basis points on fears about the government’s stability but then recovered as the fragile coalition held together.