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Not quite what markets had hoped

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  • The Italian election result was not especially market friendly. Bersani won the lower house as expected, but only just (and the victory is challenged). The Five Star protest movement took 25% of the popular vote, and there is no overall control in the Senate.
  • The election result is likley to matter more through the read through to Euro area politics than for Italian politics per se. The support for anti- austerity parties, and a weakened voice for Italy in Euro area discussions are what is likely to matter.
  • US Fed Chairman Bernanke is scheduled to testify before the Senate Banking and Finance Committee. With the FOMC clearly divided over how to dismount from quantitative policy measures, the remarks will be closely followed.
  • Data today is not likely to be a focus for investors. The UK offers the CBI distributive trades survey and the US has consumer confidence which is seen rising a little.

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