A leveraged exchange traded note tracking Italian government bonds was among the leaders Friday morning after Italy’s Senate passed austerity measures, easing tension over the European debt crisis heading into the weekend.
PowerShares DB 3x Italian Treasury Bond Futures ETN (NYSEArca: ITLT) was up more than 11% in early trading. The debt instrument gives investors 300% leveraged exposure to the performance of an Italian bond futures index. PowerShares DB Italian Treasury Bond Futures ETN (NYSEArca: ITLY) is an unleveraged version.
In equities, iShares MSCI Italy (NYSEArca: EWI) added 3.5%.
The austerity vote Friday will trigger the end of the era of Prime Minister Silvio Berlusconi, who is expected to resign, making the way for a new government led by Mario Monti.
“Monti is by far the best candidate to lead a technocrat government, which is the only way out of Italy’s predicament,” James Walston, a professor of politics at the American University in Rome, told Bloomberg. “The measures voted on today “will be a start, but then there will be difficult times, more cuts and greater hardships.”
PowerShares DB 3x Italian Treasury Bond Futures ETN
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