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Pimco exits Italy on political risk

Published 06/05/2017, 12:39 PM
© Reuters.  Pimco exits Italy on political risk
EWI
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  • "Getting paid 2% on the 10-year bond to fund Italy doesn’t look attractive to me,” says Andrew Balls, Pimco's CIO for global fixed income. "Our baseline isn’t that Italy is going to leave the euro zone but it doesn’t seem a crazy idea ... The probability that things go wrong, it’s too high.”
  • After Brexit and the French election, analysts have moved on to Italy as the next spot for political tremors, wth some expecting snap elections to be called as early as this fall.
  • The spread between Italian and German 10-year debt has risen over the past couple weeks, but remains a relatively slim 198 basis points.
  • The iShares MSCI Italy Index (NYSEARCA:EWI) is down 1.45% today, but up 15.4% for the year.
  • Now read: Political Jitters Put These Europe ETFs In Focus


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