Spiralling Italian crisis sees global stock market sell-off and a slump in the euro
New York — A spiraling Italian political crisis provoked a global stock market sell-off on Tuesday, cut the euro to an 11-month low, and spiked short-term borrowing costs for the government in Rome. Investors fear that repeat elections — which now seem inevitable in the eurozone’s third-largest economy — may become a de facto referendum on Italian membership of the currency bloc and the country’s role in the EU. Safe-haven US treasury bonds rallied, as did the yen and the dollar, but gold was nearly unchanged with spot prices at $1,301.94 an ounce early in US trading after earlier gains. "As the slide continues, you ask ‘where is the end’," said Saxo Bank’s head of FX strategy, John Hardy. Global contagion is a risk, he said, with the benchmark US S&P 500 stocks index breaching key "technical" support levels. Hardy recalled a promise made in 2012 by European Central Bank (ECB) president Mario Draghi to keep the euro intact. "If this continues for another couple of sessions, I think ...
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