European markets respond rather negatively to Italy’s budget, which it targets deficit at 2.4% of GDP for the next three years. Italian 10 year yield is up 0.268 to 3.161 for now, back above 3.000 handle. It’s also back at the level in the beginning of the month. German 10 year bund yield losses -0.06 to 0.472, back below 0.5 handle. DAX is currently down -0.68%, CAC own -0.32%.
European Commission said today that it would assess the draft budget plan of Italy before end of November. But it’s spokesman emphasized it’s just “part of the normal European Semester process, the EU’s economic policy coordination cycle, and happens each year.” European Economics Commissioner Pierre Moscovici noted that nothing would be gained from a clash with Italy but added “we don’t have any interest either that Italy does not respect the rules and does not reduce its debt, which remains explosive.”
5-Star Movement leader Luigi Di Maio, also Deputy Prime Minister of Italy, said he was not worried by market reaction and will meet investors soon.