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Italian politics and finance

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  • Italian politics seems to have an increasing element of uncertainty (and Italian politics was never that certain to begin with) as losses and the potential bail out of an Italian bank become a campaign issue.
  • One of the credit rating agencies (does anyone care which one?) downgraded Cyprus (does anyone care to what?). Markets, as ever, are way ahead of anything the rating agencies can say or do.
  • US sequestration has started already, it would seem, with the Pentagon laying off some contract and temporary workers in anticipation of actual sequestration on 1 March. So even if Congress were to sort things out, some fiscal damage has already been done.
  • The data calendar is light ahead of the Fed meeting later this week. We have money supply data in the Euro area (of some note as an indication of banking system intermediation, or lack thereof). The US offers up durable goods orders.

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