Euro Hit by Italian Political Risks, GBP Gains Despite Firm USD - US Market Open
- Equities Directionless
- GBP Rises Opens EUR/GBP to Key Support
- Euro Upside Capped by Italian Political Risks
QUICK TAKE: Euro Hit by Italian Political Risks, GBP Gains Despite Firm USD
Equities: Little direction being offered by European bourses as equity markets remain in choppy conditions. That said, with European equities broadly in the red, US futures have also drifted lower ahead of the Wall Street open.
Euro Stoxx 50 Sector BreakdownOutperformers: Energy (+1.2%), Real Estate (+1%), Healthcare (+1%)Laggards:Industrials (-0.2%), Financials (-0.9%), Consumer Discretionary (-1%)
Intra-Day FX Performance
Once again the Pound is better bid this morning with yesterday’s pushback from BoE’s Bailey on negative rates continuing to underpin. Elsewhere, EUR/GBP has continued to head lower with the cross now eyeing key support at 0.8860. That said, the Euro remains capped as Italian political risks are on the rise again amid criticisms around the proposed governance of the Next Generation EU funds, which in turn has seen former PM Renzi threaten to pull his party out of the ruling coalition. Meanwhile, the US Dollar hovered around intra-day highs as the greenback consolidates with US CPI prompting a rather muted reaction.
EUR/GBP Chart: Daily Time Frame
Commodities: Oil prices are the standout outperformer yet again, which looks to be a function of commodity index rebalancing, as highlighted recently. Gold is back around short-term resistance, however, focus will be on real yields for near-term direction. For more on key Gold levels to watch, click here
Looking ahead: Focus will be on more commentary from Fed officials, particularly Brainard in light of recent QE taper talk.
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