Italy draws fresh scrutiny, as investors eye market risks in aftermath of Turkish-lira crisis As skittish investors scan for the next trouble spot in the wake of Turkey’s currency dilemma, some market participants are turning a fresh eye to perennial market bugaboo—Italy.
The third-largest economy in the eurozone has resurfaced on investors’ radars as its populist government plans next year’s budget, which economists say are likely to expand fiscal deficits more than hoped, pitting the country against the fiscally conservative European Union.
Concerns over Italy’s fiscal road map have put local bank stocks and bonds under pressure, reviving talk of a dreaded “doom loop”, that is, the way in which Italian banks are dragged lowered by the deteriorating perception of its beleaguered government.
See: Here’s why Italy and financial markets are still headed for a showdown
“Italy should be the main focus as we enter the weekend with some pretty poor performance in their markets,” said Pe..