Mispricings Drive RV Opportunities As Italian Ref. Grows Nearer

With the Italian Constitutional Referendum just days away, investors are increasingly considering relative value strategies involving the FTSE Mib, VSTOXX and iTraxx. The Eurostoxx 50 and the FTSE Mib are both pricing in a ~35% probability of a ‘yes’ vote, which would lead to a relief rally, however polls suggest an increased likelihood of a ‘no’ vote.