It has been a mostly risk-off session on Monday, despite the 4% rally in Chinese stocks, with the Euro leading the way lower, after an early rally, due to the tensions within the EU over the proposed Italian budget deficit target for 2019. In its formal response to the EU, the Italian Economy Minister indicated that Italy will stick to its draft budget plan and that the deficit to GDP target for 2019 will remain at 2.4%. The US$ saw some safe haven demand and is generally firm against all the other majors in what has been a fairly quiet session. Sterling also fell, on news that Brexit negotiations with the EU over Northern Ireland remain unresolved and there is some concern over a challenge to the leadership of UK PM, May from within the Conservative party. Elsewhere, US Stocks are mixed, while the metals are slightly lower and WTI is slightly firmer, after a choppy but rangebound session.
There is very little to come from Asia today apart from various RBA speakers, while Europe will also be fairly quiet from an economic perspective, with just the EU PPI and Consumer Confidence to go on. BOE Governor, Mark Carney will be speaking and it will likely be Brexit headlines that continue to maintain the focus of traders. From the US we get the Richmond Fed Mfg Index and the Fed’s Kashkari speaking. All eyes will be turning towards the ECB and the US GDP, due toward the end of the week.
Economic data will include:
RBA speeches: Debelle/Bullock, German PPI, Richmond Fed Mfg Index, EU Preliminary Consumer Confidence, Fed’s Kashkari Speech
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