The combination of Italian “No” and Austrian Hofer would be hellish.

We are expecting a very interesting weekend. The referendum will happen in Italy, presidential elections will happen in Austria. So as it would be expected the financial market is pretty nervous.

After all, BREXIT gave it a clip round the ear enough and nobody wants to repeat that. Nobody is working with the polls anymore. Everybody rather has the both scenarios. Actually, it is simple. Italian “Yes” would be a good news for the market the stocks would rise. On the other hand, “No” will torpedo the markets. On top of that, it is still not clear what would happen with the third biggest Italian bank Monte dei Paschi.

Capital is preventively leaving the Italy already and the state is being threatened by problems with its financing. I assume that in a case of more dramatic development ECB would start saving the Italy by buying out bonds. I personally bet on “NO”.

Next to the Italian referendum the Austrian elections will be less important from the view of the financial markets (the more it will be observed by media). Either way, if N. Hofer wins the elections the market is still going to see it as a threat that the anti-European parties will win in the year 2017 in Netherlands, France and maybe even in Germany. That’s why the difference between yields of Austrian and German bonds is unusually growing.

It is difficult to judge how it is going to end up in Austria because the debate from Thursday in Austrian television brought even more emotions into the elections. I am following both of the candidates on the social media and they are posting a lot. I would personally rather bet on Hofer which will definitely scare the markets.

The combination of Italian “No” and Austrian Hofer would be hellish. Speculators will be looking for some safe haven. Besides, that has already started. The exchange rate of bitcoin against the dollar has been sharply growing in past three days. While at the end of September it was on 600 dollars now it is already on 770 dollars. Potential Eurosceptic news will be catapulting bitcoin even higher.