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Italian Election Threatens to Shatter Quiet in Its Bond Market

  • Yield premium over bunds at five-week low in election run-up
  • Less fiscal discipline, tensions in coalition among key risks
An election campaign rally by a right-wing coalition made up of Brothers of Italy, Forza Italia, and League parties, in Rome.

An election campaign rally by a right-wing coalition made up of Brothers of Italy, Forza Italia, and League parties, in Rome.

Photographer: Alessia Pierdomenico/Bloomberg

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Judging by Italian bond markets at least, investors are unperturbed by the prospect of a right-wing coalition taking power after Sunday’s snap election. But many fear the calm will not last long.