Italy's Salvini expected to win big based on initial polls

EU poll

Although the euro is still holding firm on the day, expect this to be one of the potential headwinds for the single currency over the next few months. The European Parliament just released its first seat projections for the next European Parliament elections in May and the report shows a strong surge in support for euroskeptic forces.

Of note, Salvini's Lega party is expected to dominate Italy's vote by winning 27 seats in total. That would make his party the second biggest after Germany's CDU party, which is expected to win 29 seats in total.

Although the European People's Party (EPP) and Social Democrats (S&D) are still expected to be the dominant forces, support is seen waning with both groups expected to experience a fall in total seats with EPP dropping from 217 currently to 183 seats while S&D dominance is seen falling from 186 to just 135 seats.

Given that, the good news for the pro-euro establishment is that the populist revolt will fall short of any major reorder in parliament. However, the issue that will arise is that there could be potential roadblocks and impediments for the pro-euro establishment to advance legislation and other projects during the next term; should the forecast be accurate.

That is because the combined total seats of the EPP and S&D put together will be less than 50% of the total and that will allow for populist groups to interfere with proceedings unless the former two groups are able to call on support from other political parties.