An unprecedented year for Italy

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The year 2018 was challenging for Italy. The previously undisputed champions failed to qualify for the World Cup again; and despite starting the year as the third largest economy in the eurozone¹, it soon entered an economic crisis. We had met with two of the top three leading politicians from Italy’s Lega political party in the spring of that year. Based on these conversations and our own analysis, we believed that the risks around a potential “Italexit” were overblown. We then took a long position on Italy the same day the infamous Italexit paper was published, which pushed spreads up to 300.

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