Market update: safe havens sold off - ANZ

Analysts at ANZ noted that the new political limbo in Italy was largely shrugged off by markets as global equities rose, EUR rebounded, and safe haven assets sold off.

Key Quotes:

"PM Renzi resigned after the vote, likely leaving the gridlocked caretaker administration to President Sergio Mattarella to oversee. 

The focus for the Italian market will shift to the banking sector (-6% today), where government instability may increase borrowing costs for capital-raising banks. European bourses were led higher by DAX +1.6% while Euro Stoxx 50 added 1.2% and CAC 40 gained 1.0%. The gains continued in the US with S&P 500 and DJIA both higher. The VIX fell approximately 10% to 12.6. 

In currencies, EUR rebounded strongly after falling as low as 1.0508 on the Italian vote. Of note, the NZD has regained all of its PM Key resignation- induced weakness, trading back close to USD0.714 currently, while the AUD has also strengthened. 

Gold eased 0.2%. While initially selling off, US Treasuries rallied late, with the 10-year yield down 1bp to 2.37%. Yields in Italy rose, with the 10 year up 8bps and with similar moves seen in France and Germany."