Italy's Conte reportedly preparing for budget deficit of 1.9% to 2.0%

According to a report by Il Messaggero

• Says that Di Maio and Salvini are ready to accept new target
• Says that he himself with negotiate with EU on budget, not finance minister Tria

That's a big compromise if this is indeed proven to be accurate. It would at least allow for a chance for the European Commission to accept Italy's budget and avoid EDP measures altogether. The euro is got a pop from the headlines here with EUR/USD rising to a high of 1.1370 from 1.1340 levels earlier.

In the long run though, the deficit target is still just a target. Depending on how the economy performs next year and what fiscal measures the government chooses to adopt, they may still very well run above it.