European markets open on a higher note as Italian stocks rebound

Although Italy’s domestic political strife is still taking pole position in the markets the concerns seem to have eased slightly. 

The news flow does not particularly merit this but nevertheless the Italian market opened higher this morning, the euro rebounded and even the embattled Italian bonds are responding with lower yields.

The tensions in Italy have been rising for months as the country hasn’t been able to form a government since an election in March only for things to come to a head this week after the country’s president rejected the nomination of a eurosceptic. 

Instead he asked former International Monetary Fund official Carlo Cottarelli to form a government but Cottarelli is now considering giving up the mandate, which would pave the way for elections before the end of July.

Euro rebounds from 2018 low

The euro rebounded from its 2018 low to trade at $1.1577 but this may prove a short respite as Italy’s domestic drama has reawakened fears over eurozone stability, last seen when Greece was going through its own turmoil.

The FTSE MIB index opened 1.17% higher and Italy’s 10-year bond traded down 1 basis point at 3.02% after hitting a four-year high of 3.38% Tuesday.

Royal Bank of Scotland finance chief resigns

A day after news started leaking out in national newspapers that the government is looking to sell some of its stake in the Royal Bank of Scotland and potentially go home with proceeds of about £3 billion, RBS made the headlines again as its chief finance officer Ewan Stevenson resigned just hours before the company’s AGM. 

It is not clear when Stevenson will leave his post but the search for his replacement has already started. The bank is about to face tough questions from shareholders over plans to close branches and uncertainty over future ownership. 

However, as a sweetener, the bank is looking to get permission from the government, which owns over 70% in the bank, to restart paying dividends as it returned to started making profit again.