Trade war worries and the prospect of early elections in Italy and Britain hit European markets on Friday, while the week’s search for safety left gold on course for its best week in three years, Japan’s yen near an eight-month high and bonds surging.
A turbulent week dominated by a symbolic drop in China’s currency was not finished yet. A report that Washington was delaying a decision about allowing some trade between U.S. companies and Huawei again spooked Asia.
Europe was then led lower by a 2.4% slump in Italian stocks after Matteo Salvini, the leader of one of the country’s ruling parties, the League, pulled his support for the governing coalition on Thursday.
Snap elections have been likely for months, but markets were jarred when Salvini – who’s publicly insisted the government would last its full five years – pushed for a new poll.
Investors dumped Italian government debt, pushing yields — which move inversely to prices — on Rome’s 10-year bonds up 26 basis points to 1.8%, the biggest daily increase in over a year.