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Safe-haven Bunds and Treasuries sold off......>

ITALY: Safe-haven Bunds and Treasuries sold off and the EUR rose on the news at
1631BST that we could yet get an Italian government with a less eurosceptic
Finance Minister, with 5-Star calling for controversial eurozone exit proponent
Paolo Savona to withdraw his candidacy for the position.
- Not easy to see that happening though without Lega support, and they have
continued to insist on eurosceptic FM Savona. Additionally, Lega will have one
eye on polls showing a surge in support for their party, giving them the chance
to come out on top in early elections.
- This could drag out, with PM-Designate Cottarelli reportedly agreeing with the
President Wednesday to wait and see whether a political government can be
formed. In the meantime, risk-on moves on the basis of 5-Star attempting to form
a government without Lega`s support may prove fleeting.

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