Will he run or will he not

In the following hours, Italy’s parliament should pass the finance bill and after that Monti will go up to the Quirinale hill to resign..  Right after that, it is now looking likely even though not yet certain, that Mr Monti will run for office in the next parliament. What is not sure yet is with whom. Elections will be held in February 2013

If markets are a good barometer, and they usual are so indeed, Monti will run, and if he runs he has a decent chance to replace himself as the next PM. The Bund /BTP spread has gone back down below 300bps and the FTSE Mib is above 16,000.

Even if Mr Monti does run, the next few months will not be a clear ride, and at these levels of spread and MIB, it may make some sense to take some profits…