Note that yesterday Italy's constitutional.....>

BTPS: Note that yesterday Italy's constitutional court rejected the referendum

on proposed electoral law changes. These changes would have seen Italy's

parliament elected via a first past the post (FPTP) system, similar to the UK,

rather than part proportional representation (PR) and part FPTP. BTP spreads

have narrowed this morning. UniCredit note that "it takes out one of the

elements that could have created further political instability in the governing

coalition, as it removes the urgency to change the current electoral law before

the referendum takes place." However, they note that the current political

premium in BTPs is modest so leaves limited scope for BTPs to rally.