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Italy: Waiting For The White Smoke

Political turmoil in Italy is nothing new. According to Deutsche Bank researchers there have been 90 governments in the past 116 years. This equates to an average tenure of just 1.3 years. The Italian election was nearly three months’ ago, since when the far-right League and anti-establishment Five Star Movement have failed to form a coalition. Events over the weekend imply even the resulting caretaker government may not have the confidence of parliament, hence markets are preparing for yet another Italian election.  In itself this is no big deal, except for the risk that a groundswell of support for populist parties...