European Affairs Minister Paolo Savona told lawmakers in Rome this morning, adding that "we need to be prepared to face such a shock."

While Italian bond yields blipped higher and then retraced on the headlines, Italian bank stocks were hit hard and are back at one-week lows now...

EURUSD is fading but not specifically on these headlines.

However, what is of note is the fact that Italian redenomination risk remains significantly elevated - having ignored any normalization seen in other assets since Italy's crisis exploded (and the Italian Central Bank bought a record amount of BTPs to save the perception of markets)...