On Monday, Italian BTPs-led Eurozone bonds dropped after the victory of Giorgia Meloni-led’s right-wing bloc secured a majority in Italy’s parliamentary elections. In the election, Meloni’s Brothers of Italy party emerges as the largest in the Senate and the Chamber of Deputies. The next Italian government is likely to be led by a party which has sympathised in the past with Benito Mussolini’s fascist policies.

The benchmark Italian 10-year bond yield increased 12 basis points to 4.48 per cent at the open. On the other hand, the 2-year bond yield increased only ten basis points to 3.13 per cent. The 2-year bond yield is a more direct reflection of looming stress in Eurozone debt markets.

While the move was a sharp one, it came on a morning of general alarm in global bond markets at the prospect of European policy cracking under the pressure of the ongoing energy crisis. The German 10-Year yield also climbed by seven basis points to 2.10 per cent, while the 2-year note yield increased five basis points to 1.96 per cent.

Contrastingly, Italian stocks welcomed the result, which promises a broadly pro-business agenda from the next government. On Monday, the FTSE MIB index opened up 0.2 per cent, making it the second-best performing index in Europe.