Comments by Morgan Stanley on BTPs
They say that the contagion effect could happen as a result of banks' BTP holdings. They say that with 10-year yields holding over 2.40%, it would put the banks' non-carry adjusted PNL into the red.
If so, Italian banks are a little fortunate then with BTPs catching a bid today and yields falling to 2.35% currently - with investors seemingly either confident that Conte's leadership as Italy PM will be market-friendly or happy that Zingales is reportedly to take up the finance minister post instead of euroskeptic Savona.
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