Today Matteo Renzi, Italy's youngest-ever prime minister, will visit Rome's Quirinale Palace to tender his resignation to the president. Ordinarily, such exits would not merit much attention - Italy, after all, has seen off dozens of prime ministers since World War II. Moreover, after the inevitable quick-fire reaction, markets this morning quickly settled.

Yet politics this year has been far from typical, and the rejection (with a 60% majority) of Renzi's constitutional reform package in Sunday's referendum leaves the old political roadblocks in place, not least Italy's 'perfect bicameralism', whereby the Italian Senate has as much legislative power as the lower house. Italy has yet to address the problems of its banking sector, and the resounding 'No' vote doesn't make resolution any easier. Moreover, the rejection of the reforms may of itself be a lesser worry than the rejection of the political establishment that the vote also represented. (Matteo Renzi had promised to resign if he lost, making the vote as much about him and his government as about the reforms themselves.)

This week's bulletin also includes:

  • In a referendum on Sunday, Italians voted decisively against the reform package proposed by the prime minister.
  • In Austria, far-right candidate Norbert Hofer unexpectedly lost the presidential election, to the relief of the EU.
  • Mark Carney warned the EU against reducing ties to London, describing the City as 'Europe's investment banker'.
  • US Treasury yields pushed upwards and unemployment dipped to a low of 4.6% ahead of the Fed's rate decision.

View this week's Market Bulletin, which contains thoughts and opinions of St. James's Place and our range of investment managers on the key issues affecting investors.

St James's Place Group plc published this content on 05 December 2016 and is solely responsible for the information contained herein.
Distributed by Public, unedited and unaltered, on 05 December 2016 14:43:03 UTC.

Original documenthttps://www1.sjp.co.uk/press-and-media/latest-news/2016/05-12-2016

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