Italy

Italian referendum vote is scheduled For Sunday.Latest Poll ,reported last week has the “NO” Vote with a substantial lead.According to Italian law no “Polls” can take place within 2 weeks of Vote.This referendum is whether or not Italy should have a constitutional overhaul,not A vote on leaving Eurozone .PM Renzi has said he will step down  if a “no” vote wins.  If this  does occur new elections will be called and it is possible that an Anti-Europe party could be elected.These elections will be sometime later next year.Their is plenty of steps that need to happen to turn this into a Global crisis and Not just an Italian one.We can look at the  BTP/Bund spread to  see what is being priced in

bund-s

The spread is moving higher,near a 2 year high so it is pricing a no vote.The surprise would be a yes vote which will see a risk on move in European stocks  and a rally in BTP’s  and weakness in bunds. This event is nowhere near as Important as brexit vote or trump election.

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