07.34 Just to add to the fun today, the Italian Treasury is due to sell €8.75bn of six-month bills later, while tomorrow, there is set to be an auction of as much as €6.5bn of five- and 10-year bonds.
07.22 Both London's FTSE 100 and Italy's MIB are expected to open lower this morning. David Jones and Brenda Kelly from IG tweet:
07.10 Ambrose Evans-Pritchard, the Telegraph's International Business Editor, wrote last night that the eurozone's debt crisis strategy was "in chaos" as the election result complicated efforts to forge a government able to carry through EU-imposed reforms:
“The majority of Italians have clearly voted against the Brussels consensus. That is a damning indictment,” said Mats Persson from Open Europe.
A euphoric rally on European bond and stock markets early on Monday gave way to abrupt selling as it became clear that Italy would be left with a hung parliament and no consensus over fundamental policies, leaving the country almost ungovernable.
The yield spread of 10-year Italian bonds over German Bunds jumped 30 basis points to 290 in late trading. The MIB index of stocks in Milan saw a rollercoaster day, while the euro gave up its early gains against the dollar.
The centre-Left Democrats of Pier Luigi Bersani won the most votes on the popular count with pledges to stay the course on EU crisis strategy, but fell short of seats under Italy’s complicated electoral system. He cannot pass legislation without the backing in both houses.
07.01 The impasse in Italy means another poll is in the offing. Robin Bew, chief economist at The Economist Intelligence Unit, tweets:
06.58 Market watchers are preparing for a rocky day in light of Italy's deadlock. Katie Martin, currencies and bonds editor at Dow Jones, tweets:
06.55 Italian newspapers have neatly summed up the outcome of the poll. The headline in Rome newspaper Il Messaggero is: "The winner is: Ingovernability."
Meanwhile, alluding to the fact that Grillo's grass-roots movement called itself a non-party, Massimo Giannini, commentator for the Rome newspaper La Repubblica, said: "The 'non-party' has become the largest party in the country."
06.52 Commenting on the political stalemate, Annalisa Piazza of Newedge Strategy said that the election outcome left a picture of "extreme uncertanties in the economic and political scenario of Europe". She added:
The Centre-left coalition party won with a slim majority at the Chamber whilst the Senate is extremely divided, a clear sign of ungovernability. Italian people have clearly voted against austerity, with the ex-comedian Grillo and Berlusconi gaining around 55pc of the votes. Monti received less than 10pc of votes, a sign that his political career is probably close to its end.
Needless to say, the past technocrat government's tough fiscal austerity was not welcomed by Italians despite the positive effects on the country's position within the Eurozone. The vote against further austerity is clear but - in our view - it will bring more and more uncertanties in the future.
Looking at the real economy, non-governability will reduce the stimulus to investments, households will be reluctant to spend their money on durable goods as risks remain high. Capital flows towards Italy will be hit by the uncertain political scenario as foreigners will be more and more sceptical on the country's productivity scenario.
06.50 Political paralysis in the eurozone's third-largest economy has unnerved financial markets amid anxiety that the deadlock could reignite the region's debt crisis.
On Wall Street, the Dow Jones slid 1.6pc to 13,784.17. In Asia, the Nikkei sank 2.26pc to 11,398. Australia's main index dropped 1.03pc to 5003.57
European markets are expected to follow Asia and America lower. Italy's MIB is predicted to open down 2.5pc while spreadbetters forecast that the FTSE 100, Paris' CAC and Frankfurt's DAX would open down as much as 2.6pc.
06.48 Italy faced political deadlock on Tuesday after an election that saw the 5-Star Movement of comic Beppe Grillo become the strongest party in the country but left no group with a clear majority in parliament.
Italy's centre-left coalition will win a majority in the lower house of parliament but the upper house will be deadlocked, the Interior Ministry said on Tuesday after almost all votes were counted. No party or coalition won a majority of seats in the Senate, which a government would need to pass legislation.
[SUP]Comic Beppe Grillo, whose 5-Star Movement became the strongest party in the country.[/SUP]
06.45 Good morning and welcome to The Telegraph's live coverage of the markets' reaction to the Italian election impasse.
07.22 Both London's FTSE 100 and Italy's MIB are expected to open lower this morning. David Jones and Brenda Kelly from IG tweet:
07.10 Ambrose Evans-Pritchard, the Telegraph's International Business Editor, wrote last night that the eurozone's debt crisis strategy was "in chaos" as the election result complicated efforts to forge a government able to carry through EU-imposed reforms:
“The majority of Italians have clearly voted against the Brussels consensus. That is a damning indictment,” said Mats Persson from Open Europe.
A euphoric rally on European bond and stock markets early on Monday gave way to abrupt selling as it became clear that Italy would be left with a hung parliament and no consensus over fundamental policies, leaving the country almost ungovernable.
The yield spread of 10-year Italian bonds over German Bunds jumped 30 basis points to 290 in late trading. The MIB index of stocks in Milan saw a rollercoaster day, while the euro gave up its early gains against the dollar.
The centre-Left Democrats of Pier Luigi Bersani won the most votes on the popular count with pledges to stay the course on EU crisis strategy, but fell short of seats under Italy’s complicated electoral system. He cannot pass legislation without the backing in both houses.
07.01 The impasse in Italy means another poll is in the offing. Robin Bew, chief economist at The Economist Intelligence Unit, tweets:
06.58 Market watchers are preparing for a rocky day in light of Italy's deadlock. Katie Martin, currencies and bonds editor at Dow Jones, tweets:
06.55 Italian newspapers have neatly summed up the outcome of the poll. The headline in Rome newspaper Il Messaggero is: "The winner is: Ingovernability."
Meanwhile, alluding to the fact that Grillo's grass-roots movement called itself a non-party, Massimo Giannini, commentator for the Rome newspaper La Repubblica, said: "The 'non-party' has become the largest party in the country."
06.52 Commenting on the political stalemate, Annalisa Piazza of Newedge Strategy said that the election outcome left a picture of "extreme uncertanties in the economic and political scenario of Europe". She added:
Needless to say, the past technocrat government's tough fiscal austerity was not welcomed by Italians despite the positive effects on the country's position within the Eurozone. The vote against further austerity is clear but - in our view - it will bring more and more uncertanties in the future.
Looking at the real economy, non-governability will reduce the stimulus to investments, households will be reluctant to spend their money on durable goods as risks remain high. Capital flows towards Italy will be hit by the uncertain political scenario as foreigners will be more and more sceptical on the country's productivity scenario.
06.50 Political paralysis in the eurozone's third-largest economy has unnerved financial markets amid anxiety that the deadlock could reignite the region's debt crisis.
On Wall Street, the Dow Jones slid 1.6pc to 13,784.17. In Asia, the Nikkei sank 2.26pc to 11,398. Australia's main index dropped 1.03pc to 5003.57
European markets are expected to follow Asia and America lower. Italy's MIB is predicted to open down 2.5pc while spreadbetters forecast that the FTSE 100, Paris' CAC and Frankfurt's DAX would open down as much as 2.6pc.
06.48 Italy faced political deadlock on Tuesday after an election that saw the 5-Star Movement of comic Beppe Grillo become the strongest party in the country but left no group with a clear majority in parliament.
Italy's centre-left coalition will win a majority in the lower house of parliament but the upper house will be deadlocked, the Interior Ministry said on Tuesday after almost all votes were counted. No party or coalition won a majority of seats in the Senate, which a government would need to pass legislation.
[SUP]Comic Beppe Grillo, whose 5-Star Movement became the strongest party in the country.[/SUP]
06.45 Good morning and welcome to The Telegraph's live coverage of the markets' reaction to the Italian election impasse.