NEW YORK (TheStreet) -- Political strife in Italy, much like the issue we face here in the United States, is having a negative effect on European financial markets.
The first chart below is of the 10 year yield on the Italian government bond.
In recent weeks, a struggle for power in the form of re-election rumors among top parties in Italy's parliament has put into question the sustainability of the country's economic recovery.
Deadlocked Italian elections last February left no party the ability to govern alone, this has meant polarization and political stalemates ever since.Italy suffers high unemployment and meager growth currently, but added political uncertainty makes recovery efforts that much more difficult. If parliament cannot make coordinated policy decisions then the country's fiscal operations are in jeopardy. (FXE) over CurrencyShares Japanese Yen Trust (FXY). The European currency has already corrected lower against the safe haven Japanese yen as uncertainty has arisen over future risks the currency may face.
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