"Markets have lost confidence in Italy's finance chief, analysts say"".On Tuesday, Italian bond yields hit nearly a five-year high as Tria delivered a speech in the Italian parliament.
• Higher yields tend to point to a higher risk environment.
•At the time, the yield on the 10-year government bond stood at about 2.8 percent. On Tuesday morning, the same yield hit 3.7 percent. "
"Market players have lost confidence in the Italian finance minister's pledges to deliver a sound budget, analysts told CNBC on Tuesday.
There's been a change in market sentiment from late September, when Giovanni Tria, the country's finance chief, presented new deficit figures that were much higher than what he had initially suggested.
"The market lost confidence in Tria after he could not deliver on his promise to have a budget deficit below 2 percent in 2019, instead Di Maio and to a lesser extend Salvini (the two deputy prime ministers) forced Tria to accept a higher budget deficit," Carsten Hesse, European economist at Berenberg told CNBC via email."
"On Tuesday, Italian bond yields hit nearly a five-year high as Tria delivered a speech in the Italian parliament. Higher yields tend to point to a higher risk environment. The move in Italian yields was seen despite Tria stating that he wanted a "constructive dialogue" with the EU over the 2019 budget."
"As a result, investors have concluded that budget policies, including the size of the deficit, are set by the two deputy prime ministers, and not by the finance minister. Given the hostile rhetoric towards Europe, this is a concern for most investors," Nielsen added.
Both Luigi di Maio and Matteo Salvini, leaders of the two coalition parties, have exchanged strong words with the European Commission. On Monday, Salvini called European Commission President and economics commissioner the "enemies of Europe."
The European Commission sent a letter to Italy last Friday outlining that the new budget forecasts present a "significant deviation" from European fiscal rules."
https://www.cnbc.com/2018/10/09/markets ... s-say.html