05
Dec
2016

Potential “Systemic Crisis In Eurozone” After Italy Votes No, Renzi Resigns

Italy Votes No, Renzi Resigns – Potential “Systemic Crisis In Eurozone”

Italy’s Prime Minister Matteo Renzi has said he will officially resign Monday, after voters apparently rejected his proposals for constitutional reform. What should investors keep an eye out for after his defeat?

Although the referendum on Sunday was officially on Renzi’s plan for legislative overhaul, it was widely seen in Italy as a vote of confidence in the prime minister and his government. In voting “no” — projections suggest 59% of those in the ballot made that choice — the Italians have set the stage for an early election and perhaps given local populist parties the chance to deliver a Brexit- or Trump-style shake-up.

But if the political uncertainty lasts, the fallout from the vote could have an effect not only within Italy — on its already embattled banks, for instance — but also beyond the borders of the boot-shaped country.

The problems in Italy could — in theory — “spark a systemic crisis in the eurozone,” said Holger Schmieding, chief economist at Berenberg, in a recent note.

A “protracted period of political uncertainty after a ‘no’ vote could exacerbate the Italian banking issues, unsettle the Italian bond market and weigh on business and consumer confidence,” he said.

Over recent weeks, the spread between Italian and German 10-year government-bond yields has reached a two-year high, according to Dow Jones Newswires. That has been interpreted by some as a sign that the eurozone is at risk of a breakaway.

Even though markets have been anticipating a “no” vote in Italy, Italian sovereigns bond yields may continue to surge as investors will ask higher return for their risk…”

Real full article from Marketwatch here

Gold and Silver Bullion – News and Commentary

Euro Slips With Asian Stocks While Bonds Rise as Italy Votes No (Bloomberg.com)

Gold prices nudge up after Italian PM resigns (Reuters.com)

Gold Prices Ease, Surrender Gains On Dollar Strength (NDTV.com)

Euro Reaches 20-Month Low as Renzi Concedes Referendum Defeat (Bloomberg.com)

Renzi Quits as Italy Referendum Defeat Deepens Europe’s Turmoil (Bloomberg.com)

What to know now that Italy has voted ‘no,’ with Renzi set to step down (MarketWatch.com)

Trump Takes On China in Tweets on Currency, yuan drops amid concern China to be named manipulator (Bloomberg.com)

We Have Killed Capitalism – Jim Sinclair (USAWatchDog.com)

Donald Trump’s unhappy fate is to oversee a financial crisis far worse than the last (CityAM.com)

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Gold Prices (LBMA AM)

05 Dec: USD 1,164.90, GBP 915.84 & EUR 1,095.36 per ounce
02 Dec: USD 1,171.65, GBP 929.00 & EUR 1,100.88 per ounce
01 Dec: USD 1,168.75, GBP 930.09 & EUR 1,099.68 per ounce
30 Nov: USD 1,187.40, GBP 952.06 & EUR 1,115.44 per ounce
29 Nov: USD 1,187.30, GBP 952.45 & EUR 1,119.98 per ounce
28 Nov: USD 1,189.10, GBP 956.51 & EUR 1,117.99 per ounce
25 Nov: USD 1,187.50, GBP 953.30 & EUR 1,121.83 per ounce

Silver Prices (LBMA)

05 Dec: USD 16.62, GBP 13.05 & EUR 15.54 per ounce
02 Dec: USD 16.35, GBP 12.95 & EUR 15.36 per ounce
01 Dec: USD 16.30, GBP 12.91 & EUR 15.35 per ounce
30 Nov: USD 16.67, GBP 13.39 & EUR 15.66 per ounce
29 Nov: USD 16.54, GBP 13.26 & EUR 15.61 per ounce
28 Nov: USD 16.68, GBP 13.45 & EUR 15.73 per ounce
25 Nov: USD 16.47, GBP 13.21 & EUR 15.55 per ounce


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Mark O'Byrne
Executive Director