Stock markets eased the tension, Italy relented of the European Commission

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On Wednesday, the degree of tension on the world markets began to subside amid reports that Italy is ready to make concessions and plans to reduce the budget deficit faster than previously planned. It brought relief to risky assets in General and the single currency in particular. Asian stock markets showed mixed trends, but investor sentiment certainly has improved.
European markets opened also with a fighting spirit, reflecting the prospects of the decline of tension between Italy and the European Commission. Britain’s FTSE 100 increased 0.3%, the French CAC 40 rising 0.4%, Italy’s FTSE MIB raliroad by 1.38%. German markets are closed today for a national holiday. Russian indexes following the sites of the Old world settled in green zone – index of Masuri increased by almost 0.6%, the RTS adds 0.3 percent.
Rumours about concessions of the government of Italy has sent the Euro from 1.5-month lows around 1.15 to levels close to 1.16. Traders await further developments on this front, but temporarily distracted by the business activity indicators in the services sector of the Eurozone countries and composite PMI. Further attention will shift to the US, where withered the same indicators the ADP employment report and speeches by a number of fed officials, including the head of the Central Bank of Powell.
The ruble opened with the gap down to a basket of currencies, but to build on the momentum correction is not in a hurry with an eye on the overall positive investors and a bullish bias in prices. After such an aggressive recovery, the Russian currency will be difficult to continue the climb without any extra drivers. Thus, in the second half of the week increases the risk of profit-taking, especially in tandem with the Euro, which is recovering on Forex. The immediate aim of the Euro/ruble – mark of 76 rubles.
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Nathan Lambert
Head of research,
Global FX