Italy's Mario Draghi Resigns
Published Date: 7/14/2022
Source: Bloomberg Quicktake: Now
Italian bond and stock futures plunged to fresh lows for the day and the euro dipped back below parity with the US dollar after Italy’s Prime Minister Mario Draghi said he would offer his resignation to the country’s president. That offer was subsequently rejected. The euro was down as low as $0.9984 after Draghi’s offer was announced, but still above its lows from earlier in the session. September futures on 10-year Italian government debt plunged below 122, the lowest since June and below their 21-day moving average. Contracts on the benchmark equity index extended losses and fell by more than 5% on the day. The political turmoil in Italy could complicate the European Central Bank’s efforts to raise interest rates for the first time in a decade as it looks to end years of negative borrowing costs in the region. ECB policy makers are scheduled to deliver their next decision on July 21. That day is also when a key Russian gas pipeline is scheduled to reopen. The difficulty for the ECB is to tighten policy while keeping government bond markets orderly, given higher borrowing costs will hit more indebted nations such as Italy harder. “The mandate is inflation, but the problem will lie in execution/transmission when the ECB hikes,” Bipan Rai, Canadian Imperial Bank of Commerce’s head of foreign-exchange strategy said. “This could complicate things.” Markets for Italian bonds and stocks were closed at the time of the Draghi’s announcement, which President Sergio Mattarella has since rejected. Mattarella invited Draghi to address parliament to assess the political situation after a key coalition party boycotted a confidence vote on Draghi’s government Thursday. Subscribe to our YouTube channel: https://bit.ly/2TwO8Gm Subscribe to our newest channel Quicktake Explained: https://bit.ly/3iERrup Bloomberg Quicktake brings you live global news and original shows spanning business, technology, politics and culture. Make sense of the stories changing your business and your world. To watch complete coverage on Bloomberg Quicktake 24/7, visit http://www.bloomberg.com/qt/live, or watch on Apple TV, Roku, Samsung Smart TV, Fire TV and Android TV on the Bloomberg app. Have a story to tell? Fill out this survey for a chance to have it featured on Bloomberg Quicktake: https://cor.us/surveys/27AF30 Connect with us on… YouTube: https://www.youtube.com/user/Bloomberg Breaking News on YouTube: https://www.youtube.com/c/BloombergQuickTakeNews Twitter: https://twitter.com/quicktake Facebook: https://www.facebook.com/quicktake Instagram: https://www.instagram.com/quicktake