Ciao PipMeHappy, thanks for the input. The info is from daily political commentary by the BBC the suppositions is that in the unlikely event of a loss, the prime minister may have to resign giving the opposition 5 star movement a chance to launch a referendum on membership of the EU.
Please fell free to add your own political potentials to look out for.
no, nothing wil implode but a no will trigger new problems which are potentially dangerous.
the reason why this referendum is dangerous is because Renzi said he will resign as PM of italy if the refendum fails which will lead into new elections in italy. out of that the problem of new leadership arises as the actual leading party in polls is a anti euro party. mille stelle movement or such a name, dont know the name sorry, i know has something to do with stars and some number
…Renzi has not made this his career goal, though he does represent the ‘charismatic leader’ politics of post-Berlusconi Italy.
Here is an excerpt from a Credit Suisse report from THIS MONTH saying that if the ‘no’ vote in Italy’s constitutional referendum were to win, there would be only a 30% chance of Renzi stepping down and only a 1% chance of this triggering an ‘Itexit’ from the EU, AND a 70% chance of Italy having stability thanks to a ‘technical’ government.
If you did not know, Italy already had TWO ‘technical’ governments - Monti, then Letta - when there could be no elected government in the pre-Renzi years…so, it is not a new animal …
Cinque Stelle are in disarray with their lack of structure and the death of their founder (not Grillo), and their Rome mayoress having proven to be an abject failure, personally and politically - their only chance to prove to protest voters that they could do things differently once in the corridors of power.
Conclusion: do NOT bet on a ‘no’ vote equalling a golden goose and go short the Euro.
didnt know these facts. thank you very much for setting this straight. as usual medias all over the world blowing things up and pretending theyre bigger than they truly are.
I would wait for definite trend to form before getting in on a position, the technicals would be reliable here because there is a fundamental reason for the move rather than it just being the result of daily volatility.
A simple price cross over the 14 period MA might work well; or you might want a price cross of the 3rd standard deviation of the 14 period MA to be statistically sure there is a genuine cross over; that’s all assuming the market response is characterised by a ‘steady’ move in one direction or the other.
If there is a precipitous ‘spike’ then some variation of the straddle might work best. Not sure how to prime yourself simultaneously for those two possibilities.
Personally going to wait and see, it may be the case that nothing significant happens at all or the moves are too choppy to safely get in on.
The Italian banking system is in crisis and although J.P. Morgan have stabilised the balance sheet of MPS (Monthe dei Paschi di Siena), there is plenty of weakness with non-performing loans and bail-ins in place for a number of other banks… Italian stability is not tied to this referendum… Also, there are 4.5 million Italians voting from abroad, so there will be potential counting issues that will delay the result… So the market reaction cannot be immediate, nor one-directional. Plus, the Yes or No vote will impact Italian politics first and foremost, not Europe… Yet, as they say, a market bubble can burst for the most unsuspected reasons…Usually when an event is expected, markets pre-position or hedge their exposure, so this is not an unexpected event of the sub-prime mortgages kind, à-la 2008… I seriously doubt that you will see much at all in currencies… EurUsd has done very little in two years…you could throw the kitchen sink at that pair and it will not budge out of its 1.05-1.15 range.
My only hope is that there are clear trends forming and not some kind of spike or choppy activity. I’m looking at putting 2-5% of account balance at risk.