TYC Strategy Italy

Triggered by political uncertainty, the strategy determines the end of
favorable reflationary conditions and sees increased risk in the
balance-of-payments cycle, which requires much more defensive positioning.

Reversals in investor sentiment and capital flows reflect concerns about
Italy's willingness to accept an internal devaluation in order to achieve
debt sustainability. As a result, bond markets price increased credit risk,
which causes the strategy to change the cycle phase to 'acute risk'.

The potential for capital outflows makes even bonds risky, which the
strategy normally uses as a defensive investment.