The European Commission cut its GDP projection for the euro area to 1.3% from 1.9% for 2019. Italy was affected the most by the new winter forecasts. The EC sees the Italian economy growing barely 0.2% this year, down from 1.2% expected recently. In response to these forecasts the Italian/German 10Y yield spread has spiked 10 basis points to above 280 bps, the highest in nearly two years. Moreover, the Italian stock market (ITA40 on xStation5) has plunged as much as 1.2% following the release. The Italian index is the worst one in Europe at the time of writing.
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