Italian Deputy Prime Minister, League leader Matteo Salvini insisted today that “we will not backtrack, we will not backtrack” referring to the 2019 budget deficit target. He blamed the volatility in the markets on speculators that are taking advantages. Salvini said “If one had evil thoughts, he would think there are people betting on the spread because they don’t want Italy to grow and create jobs”. And, “speculators acting like (George) Soros are betting on Italy’s collapse to buy at discount prices the healthy companies, and there are many of them, that have remained in this country.”
Salvini also warned that credit agencies have to be fair on Italy. He said “I hope no one has prejudice toward this government, or strange intentions.” Moody’s is going to review Italy’s Baa2 rating, with negative outlook, by the end of October. S&P will also review the BBB with stable outlook rating on October 26.
At the time of writing, Italian 10 year yield is up 0.1838 at 3.59. German 10 year bund yield is down -0.044 at 0.533. Spread is larger than the alarming 300 level.