Italy’s Deputy PM Salvini faces stumbling blocks in his push for power – FT

In its latest story published on Monday, the Financial Times (FT) reports that the Italian Deputy Prime Minister (PM) and far-right interior minister Matteo Salvini’s goal of calling for a snap election is likely to face many stumbling blocks.

Key Highlights:

“Italy’s parliamentarians are expected to return from summer recess within the next two weeks for a no-confidence vote against the government. President Sergio Mattarella could then give exploratory mandates to the League and Five Star to try to form another government either with each other or the centre left.

But a person close to the president’s office said he is considering whether or not to impose a budget before or to give it to an interim government to do.

The biggest threat to Mr. Salvini’s plans would be Five Star and the centre-left Democratic Party forming a caretaker government to pass the budget. Matteo Renzi, the former centre-left premier, said on Sunday that holding early elections during the preparations of budget was “crazy”. Luigi Di Maio, leader of Five Star, said it was “foolish and dangerous”.”

The uncertainty around the Italian political scenario will continue to keep the EUR/USD upside in check, in the wake of widening Italian-German yield spread. At the press time, the spot trades better bid just ahead of the 1.12 handle, locked in an extremely tight range.