What Italian political turmoil means for fixed income

We had a glimpse of the potential market implications of a more eurosceptic Italian government in recent weeks.

The cost of borrowing for Italian credits increased materially as investors demanded greater compensation for lending to companies whose legal jurisdictions are perceived to be less committed to the euro.  IW Poll: Will the ECB extend its QE programme beyond September? When the Lega Nord-Five Star Movement coalition government recognised the market's nervousness over Italy's future direction, there was a hasty retreat on some of the more controversial aspects of the two parties' manifestos, and a government was quickly put together that pledged its ongoing commitment to the euro.  ...