Bond Spread Betting: Uncertain Italian Election Result Boosts Yields
In mid-morning trading, the FTSE 100 is down 75 points at 6280.
European stocks are well and truly in the red as the Italian election spooks investors.
If there is one thing that will send the markets into a blind panic, it is uncertainty.
Silvio Berlusconi’s party has performed better than expected, which has not only upset his opponents but also investors.
Mr Berlusconi gained popularity by making promises of tax cuts. Whilst these may be good for the individual, they are probably not good for the country.
Italian bond yields have ticked up to 4.86%, the highest level since November, in a clear indication that bond spread betting investors are concerned that the next Italian Prime Minister will not be as pro-Europe as Mario Monti.
The Italian economy is almost as big as the UK’s, so if there are any more doubts about their financial health, we are likely to see another wave of selling, potentially reigniting the Eurozone debt crisis.
Dow futures are currently suggesting that the index will open 70 points higher at 13,855.
Having said that, if Fed Chairman Ben Bernanke drops any more hints about winding down QE in this afternoon’s speech, US stocks could well follow their European counterparts lower.
Spread betting carries a high level of risk to your capital. You may lose more than your initial investment. It may not be suitable for all investors. Only speculate with money that you can afford to lose. Please ensure you fully understand the risks involved and seek independent financial advice where necessary.
Financial Market Comments from David Madden, Market Analyst, IG Index.
The above comments do not constitute investment advice and Clean Financial accepts no responsibility for any use that may be made of them.
Content provided by IG Index which is Authorised and regulated by the Financial Services Authority. FSA Register number 114059.
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