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Why are BTP yields trading lower at the.......>

ITALY
ITALY: Why are BTP yields trading lower at the open Wednesday morning? Perhaps
the market is reassessing the probability of early elections after the leader of
5SM, Luigi Di Maio, hinted that he is ready to work with the President's office.
While a 5SM-League coalition presents serious political and economic challenges,
a fresh election would risk becoming a de facto referendum on Italy's membership
of the EU/Eurozone. A lower probability of snap elections would be a net
positive for eurozone markets. The yield on the benchmark 10-year BTP has traded
down to 2.98% from a high of 3.42% on May 29, while the spread over the 10-year
German counterpart has narrowed to 270bps from a high of 290bps.

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