Financial markets close higher after Letta quits
IMG class=hide alt=”Financial markets close higher after Letta quits” src=”http://www.mineralfossil.com/wp-content/uploads/2014/02/wpid-84e77f768c55823897bf1f2e90ff7919.jpg” (Updates previous) (ANSA) – Rome, February 14 – Italian financial markets ended the trading day Friday sharply higher after the resignation of Enrico Letta as Italy’s premier, which cleared the way for his Democratic Party (PD) colleague Matteo Renzi to likely take on the position. PItaly’s leading FTSE Mib closed 1.62% higher at 20,436 points, its highest level since July 2011 and one of the strongest gains among European exchanges on the day./PPThe spread between Italy’s 10-year bond and its ultra-safe German counterpart also narrowed slightly during the day, closing at 200 basis points after ending the previous day at 204 basis points./PPYield on Italy’s 10-year paper dipped slightly to close trading at 3.68%, down from 3.70% at Thursday’s close./PPRenzi effectively pulled the plug on Letta’s executive when he requested the PD withdraw support at a party meeting Thursday so he could take the helm of a new one that would drag Italy out of the “quagmire”./PPIf Renzi takes the post he will be the youngest premier in Italy’s history and the country’s third consecutive non-elected premier in two years./PPAnalysts said investors seemed to have some confidence that Renzi will enact reforms in Europe’s fourth-largest economy that could boost business confidence and economic growth. “The markets seem to positively judge the potential new government…although it is premature to draw definitive conclusions,” Citigroup said in a note earlier Friday./PPAt Barclays, analysts said the rise of Renzi will probably be seen by investors as “moderately” positive because it increases the possibility of faster reforms./PPBNP Paribas warned that the “initial enthusiasm of markets may cool down in the face of the difficulty of change,” which Renzi must push via through a coalition government./PPMeanwhile, Moody’s rating agency is expected to deliver a new report on the Italian economy Friday and analysts at Credit Suisse said they do not expected any improvement in the agency’s outlook for Italy./P
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