FX Markets Signal Brexit-Like Disruption As Italy Referendum Looms

Blockchain Media Group

zerohedge.com / by Tyler Durden / Nov 22, 2016

FX traders are pricing in as big a potential disruption event for Italy’s referendum as they did (correctly) for the Brexit vote. So-called ‘currency-vigilantes’ are buying EURUSD protection across the Dec 4th date of the vote in size as Italian bond spreads (over Bunds) push to 30-month highs.

Anticipated euro-dollar price swings for the period of the Italian vote surged. Two-week implied volatility climbed to 12.5 percent, approaching the highest since the aftermath of the Brexit vote in June… and the premium for that protection across the referendum date is now at its highest since Brexit…