News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site. See our updated Privacy Policy here.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
More View more
Real Time News
  • Gold could suffer further near-term losses due to rising U.S. Treasury yields and a weak technical picture for price action. Get your weekly gold forecast from @DColmanFX here: https://t.co/g9QvH3L4It https://t.co/Vz98E0Bl9U
  • Gold has been trending lower after failing to clear resistance in the $1835 area earlier this month. Get your $XAUUSD market update from @DColmanFX here:https://t.co/3hm1g3BHgf https://t.co/MdTQKEBCBx
  • Key break here in the 10-year #Treasury yield as it rises to the highest since late June Took out 1.4230 resistance, and the 100-day SMA Eyes now on the 38.2% Fib extension at 1.4775 Also potential falling resistance from March https://t.co/4cI6l210ui
  • The move in rates after this week’s FOMC has continued and the 10 year yield has pushed up to a fresh two-month-high. Get your market update from @JStanleyFX here:https://t.co/CRWhuZ3sxD https://t.co/svHHqN2Zz8
  • S&P 500 contending with its proverbial ‘line in the sand’ as bulls and bears battle for directional control. How we close/trade around the 50-day moving average could serve as a noteworthy bellwether for risk trends headed into next week. I remain cautious below ~4,480. $SPX $ES https://t.co/qogkjs1Sx2
  • USD/JPY trades to a fresh monthly (110.57) amid the pickup in longer-dated US Treasury yields, and the exchange rate may stage a larger advance over the coming days. Get your market update from @DavidJSong here:https://t.co/dlNXOrJnM9 https://t.co/LCQd26W1zF
  • US yields continue to climb, with the 10-year Treasury yield trading above 1.45% $ZN $ZB https://t.co/N4EDfwD3nZ
  • $USDJPY bull thesis appears quite constructive. Technicals show topside breakout above trend resistance following a period of consolidation. Bond yields providing the fundamental catalyst. Eyes on Aug/YTD highs. A broad-based deterioration in market sentiment poses downside risk. https://t.co/AazskXGjHq
  • WTI posting another session of strong gains, currently flirting with the 74 handle $CL #Oil #OOTT https://t.co/oYnm2OYRky
  • The New Zealand Dollar’s bullish breakout attempt in early-September was rebuffed. Price action at the end of the month is telling a different story. Get your market update from @CVecchioFX here:https://t.co/AquMSrssne https://t.co/DtFuFfrS7Q
Euro at Risk: How the EU Might Punish Italy

Euro at Risk: How the EU Might Punish Italy

Dimitri Zabelin, Analyst

TALKING POINTS – Euro, Italy, eu, budget

  • Rome and Brussels collision over budget is intensifying
  • Yield spread between German and Italian bonds widening
  • Unprecedented stalemate likely to cause flight from Euro

Build confidence in your Euro trading strategy with our free guide!

The war of words between Rome and Brussels is intensifying with EU policymakers heading into unchartered waters. After two budget submissions were rejected, the EU Commission has decided to meet on Wednesday Nov. 21st to discuss the possibility of opening up a case for the Excessive Deficit Procedure (EDP).

The punishments include a fine of 0.2 percent of GDP. Normally, this process would only begin in April of 2019. However, the Commission may be able to expedite the process and begin imposing fines as early as this month. The punishment would take the form of a non-interest bearing deposit. This sanction could only be avoided if more than half of all Eurozone finance ministers reject it within 10 days of adoption.

If the deposit is made, the Italian government is given 3-6 months to implement the necessary reforms. If the proper changes are not made, the deposit turns into a fine. If the government refuses to pay the initial deposit and subsequent fines, the issue would likely be taken up to the European Court of Justice.

Another punitive measure may also entail freezing Italy’s access to funds such as the European Stability Mechanism and the European Structural and Investment Fund. They may also be denied access to the Outright Monetary Transaction, a process whereby the ECB buys the bonds issued by member states from secondary sovereign bond markets (although this has not been used in practice so far).

Uncertainty about how policymakers will navigate these uncharted waters is likely to widen the spread between German and Italian bond yields further, implying increased reluctance to lend to Rome versus Berlin. It may also encourage capital to flow out of the Euro until clearer bearings may be established, sending the single currency broadly lower.

EUR/USD Decline, German and Italian Yield Spread Widening

Euro vs US Dollar, Italian vs German Bond Yields

EURO TRADING RESOURCES

--- Written by Dimitri Zabelin, Jr Currency Analyst for DailyFX.com

To contact Dimitri, use the comments section below or @ZabelinDimitri on Twitter

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES