Italy: Simmering political drama may be taking a turn - BBH

The simmering political drama in Italy may be taking a turn as the former Prime Minister Renzi stepped down as the head of the center-left PD, which sets up a formal leadership context, probably in April or May notes analysts at BBH.  

Key Quotes

“It would seem to reduce the chances of an early election.  Parliament's term ends in February 2018.   There is still risk that the left-wing of the PD splits off to form their own party, although polls suggest it would not do well in an election.  Estimates suggest, such a schism could see a score of Deputies and a dozen Senators leave.  It could weaken the current PD government and work to the benefit of the 5-Star Movement, which is having its difficulties in governing the city of Rome where it had won a local election last spring.”

“In contrast to the political drama, the economic impulses have told a story of steady growth and prices (excluding energy).  Markit will report the preliminary February PMIs.  The composite is expected to ease slightly to 54.3 (from 54.4).  To put it in perspective, consider that the three-month average is 54.2 and the six-month average is 53.6.  The 12-month average is 53.3.  It is the picture of slow and steady improvement.  The January reading of 54.4 was the highest since the time series began in early 2014.  Similarly, quarterly GDP has averaged roughly 0.4% a quarter for the past four, eight, and 12 quarters.”