Markit Recap – 5/21/2018

Has contagion returned to the eurozone?

Bismarck said politics was the art of the possible. Holders of sovereign bonds issued by eurozone peripherals will be hoping this aphorism applies to Italy’s incoming government.

A populist coalition formed of the anti-establishment Five Star Movement and the right-wing League, which looks set to form a government, seemed far-fetched immediately after the inconclusive election result in March.