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.

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
EUR/USD
Bullish
Oil - US Crude
Bullish
Wall Street
Mixed
Gold
Bullish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
GBP/USD
Mixed
USD/JPY
Mixed
More View more
Real Time News
  • Commodities Update: As of 15:00, these are your best and worst performers based on the London trading schedule: Oil - US Crude: 0.87% Gold: -1.65% Silver: -2.92% View the performance of all markets via https://www.dailyfx.com/forex-rates#commodities https://t.co/tC2A4ZCLQO
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Ripple are long at 93.41%, while traders in France 40 are at opposite extremes with 77.04%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/YgQ2ZeoxGc
  • Commodities Update: As of 14:00, these are your best and worst performers based on the London trading schedule: Oil - US Crude: 0.76% Gold: -1.70% Silver: -3.16% View the performance of all markets via https://www.dailyfx.com/forex-rates#commodities https://t.co/FSY60AhcrF
  • Indices Update: As of 14:00, these are your best and worst performers based on the London trading schedule: US 500: 0.53% France 40: 0.48% Wall Street: 0.36% Germany 30: 0.07% FTSE 100: -0.43% View the performance of all markets via https://www.dailyfx.com/forex-rates#indices https://t.co/HMELco8gcz
  • Gold (XAUUSD) - Will the 50% Fib @ $1,763/oz hold this sell-off? #xauusd #gold @DailyFXTeam https://t.co/Oe9jyzvHOt
  • Iran Revolutionary Guards Commander says Iran will avenge killings of scientists as it has in the past - This is in response to reports that an Iranian nuclear scientist has been assassinated
  • Gold takes out both 1800 and 200DMA (1798), support at 1760-65 Silver down 4%, keep in mind, volumes notably thin amid the US Holiday, thus moves are likely exacerbated
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Ripple are long at 93.40%, while traders in France 40 are at opposite extremes with 75.98%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/lGo7KC5qlA
  • UK not accepting EU's fish offer - Sun Reporter $GBP
  • EU sources now saying Barnier won't be armed with this proposal, both sides still far apart - Daily Express https://t.co/LnGQ50eLXj
Euro at Risk: How the EU Might Punish Italy

Euro at Risk: How the EU Might Punish Italy

2018-11-21 02:00:00
Dimitri Zabelin, Analyst
Share:

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