Italy: Repricing risk

Italy’s political developments have rocked both stocks and bonds. With a technical government now in charge and new elections back on the agenda, we may not have seen the end of this adjustment yet and increased market volatility is likely to persist. With hindsight, we may look back to the current turmoil and investor capitulation as a great buying opportunity. For now, however, it’s difficult to choose the best time to catch the proverbial ‘falling knife’.