The European story of the day is the Italian budget saga. We have written about it on several occasions over the past week. For now Italy remains a very European focused story as most markets do not care (Nikkei, for example  closed at 27 year highs). Below are the most important charts out of Italy:

Italian 10 year yield surges by 25 points. The big level is a few points higher.

The MIB sold off sharply, down 2.4%. Note the move today taking the index below the 50 day average. Bigger support is found a few percent lower around the 20400 level.

Worst hit are the Italian banks. Below is the intraday chart of Unicredit and Intesa, both lower by some 5.5%.

The Italian budget debacle won’t kill the Eurozone, but expect more rhetorics coming out of Italy. The Euro has sold off sharply over past sessions and is approaching the big 1.16 level. Note the 50 day average around these levels.

Source: charts by Bloomberg