The right-wing coalition surpasses the left-wing coalition and is then overtaken by the anti-European movement of the 5 Stars. The news rebounds in the foreign operating rooms, where a suspended result on the Government structure was foreseeable, but until the end there was hope for an alternation that would not favor what many considered the leap into the dark of a Movement that collects the most votes of all the others, a new entry for a forthcoming government.
Already on Friday the short positions in coverage, above all via ETFs, had accumulated during the day where the negative performance had eroded by 0,27% that compared to the previous year.
Expectations are for a spread against the German Bund which could widen towards the psychological threshold of 180 basis points, while the Ftse Mib is expected to drop which could exhaust the momentum of the last year, and therefore at least the performance of the last 12 months put into play already in the first days of the week.
We remind you that the capitalization of the Italian Stock Exchange, which represents about 40% of domestic GDP and grew by 15% in 2017, on a global basis does not reach 1% and remains in the background of the ranking in twentieth place.
But if we calculate that the presence of foreign investors on the main list is between 30 and 40%, then in the Star list the share jumps to 60% thanks to a dense presence of foreign institutional investors. So the risk of profit taking also spreading to minor price lists is evident.
There is no room for broad agreements between Renzi and Berlusconi and it will also be difficult to propose the "Gentiloni bis" solution again, because obviously the leap forward of the 5 Star Movement will weigh on the decisions of the Head of State who will have to assign the job.
With a comforting figure of growing turnout and a widespread vote of even the youngest, in any case the first reactions from abroad are not wasted in criticizing the Italian chaos that appears from the first projections of the results after closed polls. And there is already talk of new elections in October: a scenario that certainly does not help the current economic growth path and a good trend in exports and consumption.
Even if productivity remains unsatisfactory compared to the rest of the EU, the economic situation had boded well for the continuity of government activity on the reform path undertaken, but above all for an economic stabilization program which created an important prerequisite for capturing the advantages of the revolution brought about by Industry 4.0.
The markets were ready for an alternation to the right but not for a checkmate by the Movimento 5 stelle as the first party, confirmed in the expectations of the early hours of the morning.
However, such an uncertain outcome does not initially weigh on the euro, which returned above 1,24 against the dollar on Sunday once the definition of the German agreement on the grand coalition was reached and giving credit to a crucial importance for the confirmation of a solidity of the German government with respect to the Italian affairs. But Monday's openings are of a completely different tone and the euro-dollar cross returns to 1,233, also because the question of Trump's duties is further complicated, after the latest declarations with the European Union on the automotive sector and for the hypotheses of an escalation of the trade war with China.
The openings of the Asian markets are therefore decidedly negative for the geopolitical issues linked to these fears but the further pressure on the European Union, deriving from these elections which bring back the doubts on the management of the large public debt, will then not benefit the European markets , who had set aside the pro-European tendencies with the 2017 elections and who at this point see the expected worst prediction confirmed according to the first comments of the Financial Times.
