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For Professional Clients and, in Switzerland, for Qualified Investors only. In Israel for Sophisticated Investors only.
English
  • English
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  • en
© 2019. BNY Mellon Investment Management International Limited. All rights reserved.
IDEAS AND KNOWLEDGE TO INSPIRE YOUR INVESTMENTS THINKING
20 December 2018

As Christmas approaches, is Italy skating on thin ice?

Despite the latest apparent budget agreement breakthrough with the European Commission, the Italian coalition government would still like to pursue a more generous pension package for its citizens – already a significant pull on its public finances – while also increasing its social spending. Given the coalition’s existing proposals for tax at (comparatively) low rates, it is hard to see such a move as being sustainable for too long. 

 

With the uncertainty surrounding this creating volatility in the Italian bond markets, should yields rise above 4% there is likely to be extreme pressure on Italian government debt. In all probability, this means that the European Central Bank’s (ECB) hands are tied, and that it will be unable to taper the purchasing of sovereign paper (which it has been performing as part of its quantitative-easing programme) to the extent originally planned. 

 

All of this uncertainty is having a negative impact on Italian business sentiment, and, from our perspective, makes Italy more of a concern than an opportunity at present.”

 

Paul Markham, portfolio manager. Newton Investment – a BNY Mellon company.

Please note the content on this website is for Investment Professionals only and should be shared responsibly. No other persons should rely on the information contained within this website.

 

Investment Managers are appointed by BNY Mellon Investment Management EMEA Limited (BNYMIM EMEA) or affiliated fund operating companies to undertake portfolio management activities in relation to contracts for products and services entered into by clients with BNYMIM EMEA or the BNY Mellon funds.

 

On January 31, 2018, The Boston Company Asset Management, LLC (TBCAM) and Standish Mellon Asset Management Company LLC (Standish) merged into Mellon Capital Management Corporation (Mellon Capital), which immediately changed its name to BNY Mellon Asset Management North America Corporation.

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