David Hernandez, CFA
The yield on Italian 10-year government bonds has risen this year as investor concern about the country’s fiscal policies mounts. This week Italy approved its 2019 budget targeting a 2.4% deficit to gross domestic product — a larger number than markets anticipated and a higher targeted deficit than 2018’s 1.8%. The Italian coalition government is targeting higher spending to implement a monthly income for low-income citizens and reduce the retirement age despite its high public debt to GDP ratio, 131% in 2017. The European Union will provide its formal comments on the proposed budget in the coming weeks and this will likely create some short-term market movements.
The opinions expressed herein are those of Marquette Associates, Inc. (“Marquette”), and are subject to change without notice. This material is not financial advice or an offer to purchase or sell any product. Marquette reserves the right to modify its current investment strategies and techniques based on changing market dynamics or client needs.
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