The Euro: Italy is ready to make concessions

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The effect of the review of the Chinese authorities on the topic of incentives was quickly dispelled, giving way to fears about the deteriorating political situation in the world. As a result, investors fled from risk, which is clearly seen on the example of the dynamics of the Asian stock markets. Regional indexes sank by an average of nearly 3%, forming conditions for sales in the markets of the Old world. However, in Europe the pressure is more restrained.
Here the focus is Italy. The European Union is expected to reject the budget plan of the government and has threatened sanctions. Today, the Italian authorities have hinted that they can still revise the budget, if the spread is the bond yield will continue to expand. In these conversations the Euro has not halted the fall players do not hurry with the positive response, waiting confirmation. EUR/USD is testing the area of 1.1450 and can reach up to 1.14 after the loss of the intermediate support in the area of 1.1430.
The Russian stock market opened in the red as a sign of solidarity with foreign colleagues. RTS is reduced by more than 0.5%, responding to signs of weakening of the ruble after yesterday’s consolidation. The tax period reduces the negative impact of the flight from risk on the ruble, and also smoothes the negative side of the oil market. The dollar is testing the area of 65,30. and during the day can try the strength of the area of 65.50 RUB, although in General traffic are likely to be limited.
Brent develops decline, returning under the mark 79. Players continue to smoothly liquidate long positions amid falling fears of the conflict between the US and Saudi Arabia. Also buyers are deterred by today’s API report, which may reflect the growth of stocks of crude oil. At the moment the path of least resistance for Brent and down.
Nathan Lambert
Head of research,
Global FX