EUR traders will be keeping an eye on Italian politics ahead of the September 25 election.
Italian politics are volatile, an alliance formed late last week has been called off already:
Over the weekend (late Friday to be more accurate), Moody's:
- affirmed Italy's sovereign rating at Baa3
- cut Italy's outlook to "negative" from "stable"
The agency citing:
- "Risks to Italy's credit profile have been accumulating more recently because of the economic impact of Russia's invasion of Ukraine and domestic political developments, both of which could have material credit implications"
- higher funding costs
- increased risk that energy supply challenges would weaken economic prospects
- sluggish growth may pressure Italy's fiscal strength.
