January 27, 2020 / 9:51 AM / 2 months ago

Italy sovereign CDS fall to three-month low after regional election

LONDON, Jan 27 (Reuters) - The cost of insuring exposure to Italy’s sovereign debt fell to a three-month low on Monday after right-wing League leader Matteo Salvini failed to overturn decades of leftist rule in the northern region of Emilia-Romagna.

Italy’s 5-year credit default swaps (CDS) fell 11 basis points from Friday’s close to 111 bps, the lowest reading since late-October, according to IHS Markit.

CDS in Italy’s main banks also slipped, with UniCredit and Intesa Sanpaolo both seeing a 4-bps decline to 73 bps and 82 bps respectively, their lowest readings since mid-December.

The vote was won by incumbent Democratic Party governor Stefano Bonaccini despite a relentless campaign from Salvini since the start of the year. Salvini sought a shock victory that he hoped would bring down the national coalition government, which includes the PD and is riven by internal strife. (Reporting by Karin Strohecker; editing by Sujata Rao)

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