Back
2 Oct 2013
European open: European and US political worries continue to dominate
FXstreet.com (London) - Today is once again likely to be dominated by political concerns in the US and Europe. But before Congress wakes from its slumber and begins another day of bickering, attention will be focussed on Italy and the outcome of the confidence vote for Italian Prime Minister, Enrico Letta.
The vote was called after ousted PM,Silvio Berlusconi pulled the rug out from under the governing coalition by withdrawing his party’s ministers from the cabinet.
The FTSE MIB held firm yesterday on bets that Letta would survive the confidence vote, up 2.9.
A fall of government would coincide with continued negotiations in Germany, as Merkel seeks to form a ruling coalition following her general election victory last weekend.
The European Central Bank meets in Paris today, but it is likely that it will hold off on any policy moves, while retaining the option of a further interest rate cut or a stimulus measure in the face of week Eurozone growth and slowing inflation.
ECB president Mario Draghi last week raised speculation of a further LTRO. However with easing rates as a result of the Fed’s decision to hold off on a tapering of its asset purchase programme, the pressure for ECB action has dropped.
EUR/USD currently stands at USD1.3513, failing to form any real direction on the ugly dog fight between Europe and US.
The Aussie dollar rallied on the RBA announcement before retracing to USD 0.9385 on a strengthening US dollar.
Should the US government continue past Thursday, there will be no US Non-farm payroll numbers this Friday, meaning that focus will instead be on today’s private-sector compile US Sep ADP private sector payrolls, with consensus expectations of 180k.
The vote was called after ousted PM,Silvio Berlusconi pulled the rug out from under the governing coalition by withdrawing his party’s ministers from the cabinet.
The FTSE MIB held firm yesterday on bets that Letta would survive the confidence vote, up 2.9.
A fall of government would coincide with continued negotiations in Germany, as Merkel seeks to form a ruling coalition following her general election victory last weekend.
The European Central Bank meets in Paris today, but it is likely that it will hold off on any policy moves, while retaining the option of a further interest rate cut or a stimulus measure in the face of week Eurozone growth and slowing inflation.
ECB president Mario Draghi last week raised speculation of a further LTRO. However with easing rates as a result of the Fed’s decision to hold off on a tapering of its asset purchase programme, the pressure for ECB action has dropped.
EUR/USD currently stands at USD1.3513, failing to form any real direction on the ugly dog fight between Europe and US.
The Aussie dollar rallied on the RBA announcement before retracing to USD 0.9385 on a strengthening US dollar.
Should the US government continue past Thursday, there will be no US Non-farm payroll numbers this Friday, meaning that focus will instead be on today’s private-sector compile US Sep ADP private sector payrolls, with consensus expectations of 180k.