Intraday Market Thoughts

Italy Election Indecision & Bernanke's Testimony

by Ashraf Laidi
Feb 25, 2013 16:51

The latest from Italy's elections is that there is a chance that a HUNG PARLIAMENT would lead to 2nd round of voting. Center-left coalition formed by Pier Luigi Bersani leads in both the lower and upper houses of parliament in Italy's elections. Bersani's Democratic Party and its junior coalition have over 34.5% for the Chamber of Deputies, which implies leadership for a coalition or absolute majority in LOWER house. Silvio Berlusconi's rightist coalition of the People of Liberty party and the Northern League placed 2nd in the House with about 29%. The Five-Star Movement of comedian Beppe Grillo placed 3rd with around 19%. Outgoing PM Monti's Monti centrist coalition stood around 10%.  More on Italy elections below. Do not forget Fed Chairman Bernanke's testimony to Congress tomorrow at 10:00 ET, 15:00 GMT. To see which of the Premium trades have hit all targets, stopped out or remains in progress, please click on the Latest Premium Insights.

The outcome for the Senate is less clear, as Bersani's coalition took some 37%, followed by Berlusconi's alliance with around 31%. Grillo remained 3rd with some 16.5%, while Monti was in the bottom with some 9%. No absolute majority is automatically assured in the upper house.

Euro markets are in favour of a Bersani victory, as veteran politician vowed to pursue the reform path required by the EU and will have to form a alliance with Monti's coalition in the Senate.

There are mixed reports as to when the final tally will be announced but there is a possibility that the full Senate votes will be announced late Monday night or early Tuesday.  IN ORDER FOR A VIABLE GOVT TO COMMAND POWER, the ruling party must have majorities in both houses because the SENATE carries almost as much weight as the LOWER HOUSE. Both houses are able to propose legislation, except for the budget law, which must come from the Chamber of Deputies.  


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