Investor confidence in the European economy has severely dipped following the ongoing uncertainty in Italy.
Concerns over the new populist government’s euro-skeptic tendencies and budget-busting spending plans prompted a slide in sentiment among financial-market participants, according to a survey by Sentix. Expectations for the euro-area economy dropped to the lowest since August 2012, when the region was embroiled in a debt crisis that threatened to break up the bloc.
Ridiculous #Italy rally continues. 2y risk spread over #Germany plunges to 140bps as populist government prepares to face parliament vote. Slim senate majority makes this and future votes risky. https://t.co/F0ZTxgx5Ox pic.twitter.com/CCMQSOlBBV
— Holger Zschaepitz (@Schuldensuehner) 4 June 2018
“The new government in Italy is giving investors fears for the euro zone,” Sentix said. While U.S. tariffs on steel and aluminum are “also having a negative impact” it added that those concerns “seem to be even lower than those before the government in Rome reopened the euro crisis. Either way, investors expect a serious slowdown in growth.”
So @Mov5Stelle has claimed @ECB was punishing #Italy last month to ensure no populist govt took power. Seemed nuts. But then ECB released QE data today. Interesting graph, no? https://t.co/APk9VrqTOD pic.twitter.com/EIj5QGAnH8
— Peter Spiegel (@SpiegelPeter) 4 June 2018