Instant View: Berlusconi under pressure to quit

(Reuters) - Italian Prime Minister Silvio Berlusconi suffered a huge humiliation in parliament on Tuesday in a vote that indicated he no longer had a majority and ratcheted up pressure for him to resign.

The following are reactions to the news:

STEPHEN STANLEY, CHIEF ECONOMIST, PIERPONT SECURITIES, STAMFORD, CONNECTICUT

"It brings you one step closer for Berlusconi to step down. The next move is Berlusconi's on whether he would step down or call for a confidence vote. Or the opposition party would call for one. We are moving in a similar direction like Greece with a change in government. The sentiment coming into the day is that one step closer for Berlusconi leaving would be a 'risk-on' day."

THOMAS SIMONS, MONEY MARKET ECONOMIST, JEFFERIES & CO, NEW YORK

"The Treasury market likes it. Since Berlusconi has no majority, there's a feeling he could resign which could be a risk-off event. The market seems a bit confused about what to do with this."

MARC CHANDLER, GLOBAL HEAD OF CURRENCY STRATEGY AT BROWN BROTHERS HARRIMAN

"Basically this is the worst possible combination of events -- he wins the vote but doesn't get the majority.

"This is euro negative because it increases near-term uncertainty ... it keeps uncertainty hanging over the market."

DAVID GILMORE, PARTNER, FOREIGN EXCHANGE ANALYTICS, ESSEX, CONNECTICUT

"Leading up to this vote, people had been anticipating some type of leadership change. If that proves true, that should help the euro. At this point, anyone but Berlusconi is good. But if the margin requirements on Italian debt were to be raised, that will spark another wave of selling. We've been there, done that with Portugal, Greece and Ireland. It would really complicate the solvency problem for Italy."

KATHY LIEN, DIRECTOR OF CURRENCY RESEARCH AT GFT FOREX IN JERSEY CITY, NEW JERSEY

"The votes are in and Berlusconi's party won but lost its parliamentary majority which leaves the Italian Prime Minister one step closer to resignation even though he will fight vehemently to hang onto his seat."

"The euro sold off sharply after the votes were tallied because as of this second, Berlusconi is still in office.

"We are getting dangerously close to 7 percent level in Italian bonds, which is the magic number. If Italy's 10 year bond yields hits 7 percent, the speculation of Italy becoming the next Greece would escalate significantly."

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