FREELAND: CANADA WON'T ESCALATE OR BACK DOWN ON US TRADE FIGHT

MNI: PBOC To Aim To Drive Inflation Higher- Advisors

MNI: China To Issue More Bonds As Stimulus Targets Consumption

MNI: PBOC To Aim To Drive Inflation Higher- Advisors

MNI: China To Issue More Bonds As Stimulus Targets Consumption

MNI BRIEF: China Nov M1 Decline Narrows, M2 Slows

EZ/UK T-Bill Calendar: 8/13/28/50-Week BTF Auction on Monday

EZ/UK Bond Supply Calendar: 4.125% Jul-29 Gilt Due on Tuesday

MNI: CANADA OCT WHOLESALE SALES +3.3%; EX-AUTOS +0.5%

MNI EXCLUSIVE: EU-Mercosur Deal Close, But Likely Short-Lived - Officials

AUSTRALIA: 2025 Election Outcome Looking More Uncertain According To Newspoll

© 1982-2024 MNI. All rights reserved.
Terms | Privacy
Log Out
Free Trial

EUROPEAN FISCAL: Seasonality To Skew Reporting Of Q2 Italian Fiscal Data

EUROPEAN FISCAL
BulletMarketsFixed Income Bullets

Seasonal effects are likely to influence the Italian H1 YTD budget deficit figure reported by Bloomberg tomorrow, for which there is no consensus estimate. On average since 2010, the YTD budget deficit has fallen by ~3 percentage points in H1 compared to Q1.

  • This suggests that a good “anchor” to compare Q1’s 8.8% of GDP reading to is around 5.8%.
  • The 4Q rolling sum of the budget deficit will provide a cleaner read of the underlying dynamics. In Q1, this was 6.7% (vs 7.4% in Q4 2023).
  • A reminder that the Italian Government forecasts the deficit/GDP ratio to end 2024 at 3.8%, a significant step down from the 7.2% seen in 2023. Tomorrow’s Q2 data can therefore serve as an initial litmus test for the credibility of Italy’s medium-term fiscal plans.
  • Tomorrow’s data comes after Finance Minister Giorgetti announced plans for a windfall tax on companies benefiting from recent economic conditions this afternoon. The 10-year BTP/Bund spread was little changed on the announcement.
160 words

To read the full story

Close

Why MNI

MNI is the leading provider

of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.

Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.

Seasonal effects are likely to influence the Italian H1 YTD budget deficit figure reported by Bloomberg tomorrow, for which there is no consensus estimate. On average since 2010, the YTD budget deficit has fallen by ~3 percentage points in H1 compared to Q1.

  • This suggests that a good “anchor” to compare Q1’s 8.8% of GDP reading to is around 5.8%.
  • The 4Q rolling sum of the budget deficit will provide a cleaner read of the underlying dynamics. In Q1, this was 6.7% (vs 7.4% in Q4 2023).
  • A reminder that the Italian Government forecasts the deficit/GDP ratio to end 2024 at 3.8%, a significant step down from the 7.2% seen in 2023. Tomorrow’s Q2 data can therefore serve as an initial litmus test for the credibility of Italy’s medium-term fiscal plans.
  • Tomorrow’s data comes after Finance Minister Giorgetti announced plans for a windfall tax on companies benefiting from recent economic conditions this afternoon. The 10-year BTP/Bund spread was little changed on the announcement.