Forex Flash: Italy President Napolitano re-elected, PD’s Bersani resigns – TD Securities

FXstreet.com (Barcelona) - Italy President Napolitano was re-elected to a second seven-year term (738/1007 votes). However, the election took its toll, coming down to the resignation of Bersani and leadership of PD after no agreement in five votes. “So Italy has a President but no leader for its largest party”, wrote analyst Annette Beacher. “Berlusconi emerges as a clear winner with the main rival headless and in disarray, as does Napolitano as he wields the power of declaring new elections (although it’s been reported that he prefers to avoid a new election)”, she continued, adding that Napolitano’s desire is for a broad coalition government that adopts much-needed electoral reforms, which would be market positive.

TD Securities believe PdL has limited incentive to offer much ground as they look to gain significantly in new elections, “but they will also be wary of the potential for Grillo and the Five Star Movement to increase their share of votes”, while PD is in no hurry for new elections without a leader: “Selecting the presumed heir Matteo Renzi, one of the most popular politicians in Italy and perhaps the only one that could lead them to another victory, would likely lead to a schism in the party as he is seen as one reason for the failure to elect Prodi and resignation of Bersani”, said Beacher.