Global Stock Markets
The political crisis in Italy hits the world and financial markets may greet the “Black Tuesday”. In particular, the stock market is madly sold: the European stock market plunged, the Italian stock market fell more than 3%, and Dow is down to over 200 points
Italian President Sergio Mattarella sent the country on Monday to re-election. He appointed former IMF official Carlo Cottarelli as interim prime minister, and assigned him the task of preparing for early elections and passing the next budget.
The financial market is concerned that the earliest possible election in August was seen as a quasi-public vote on Italy’s role in the EU and the euro zone, which may further increase the strength of the suspected European party. Europe's political "bomb" is bound to set off the world!
The European stock market fell across the board. Italian stock market crashed and fell more than 3%. It is expected to set a maximum one-day decline after the Brexit vote. ItalybankThe stock index expanded to 5.2%, which is expected to hit the largest one-day drop in August 2016.
Foreign exchange market: Italy's political crisis has exacerbated the euro's decline - the euro has plunged more than 100 points, the lowest recorded at 1.1506 since July last year; the pound continued to decline, approaching the 1.32 mark; the US dollar index rose above 95, setting a six-and-a-half high of 95.05
From a technical point of view, the current EUR/USD is continuing to fall and has fallen below the low of November 7 last year. The next support level looks at the June high of 1.1427 (a double top is formed here).
Foreign exchange information site FOREXLIVE said that the driving factor behind the sharp decline in the euro/dollar has been not only the Italian election and political uncertainty, but more that the market is digesting the possibility of Italy exiting the euro zone.
According to the research firm Sentix, a measure of Italy’s potential to withdraw from the currency union within the next 12 months has jumped from 3.6% in April to 11.3% in May.
This also pushed the disintegration index across the euro zone to 13%, the highest level in more than a year.
"The difficulty of forming a new government in Italy and the prospect of the coalition and the five-star movement forming an anti-euro coalition have aroused investors' vigilance," said Manfred Huebner, managing director of Sentix.
The European political crisis is heating up, boosting demand for safe havens – USD/JPY has fallen sharply, falling to a low of more than a month at 108.41, while safe-haven gold has risen above 1300 in one fell swoop, with a maximum of $1306.24/oz!
Italy's bond market has been sold out franticly – Italian 10-year bond yields have soared by 76 basis points to 3.44%; Italian 10-year Treasury yields have been higher than comparable US Treasury yields for the first time in more than a year...
U.S. 10-year yield fell 12 basis points to 2.80%, hitting a one-and-a-half month low, due to strong demand for hedging; German 10-year Treasury yields fell 13 basis points to 0.21%, the lowest since April 2017!
Italian President Sergio Mattarella sent the country on Monday to re-election. He appointed former IMF official Carlo Cottarelli as interim prime minister, and assigned him the task of preparing for early elections and passing the next budget.
The financial market is concerned that the earliest possible election in August was seen as a quasi-public vote on Italy’s role in the EU and the euro zone, which may further increase the strength of the suspected European party. Europe's political "bomb" is bound to set off the world!
The European stock market fell across the board. Italian stock market crashed and fell more than 3%. It is expected to set a maximum one-day decline after the Brexit vote. ItalybankThe stock index expanded to 5.2%, which is expected to hit the largest one-day drop in August 2016.
Foreign exchange market: Italy's political crisis has exacerbated the euro's decline - the euro has plunged more than 100 points, the lowest recorded at 1.1506 since July last year; the pound continued to decline, approaching the 1.32 mark; the US dollar index rose above 95, setting a six-and-a-half high of 95.05
From a technical point of view, the current EUR/USD is continuing to fall and has fallen below the low of November 7 last year. The next support level looks at the June high of 1.1427 (a double top is formed here).
Foreign exchange information site FOREXLIVE said that the driving factor behind the sharp decline in the euro/dollar has been not only the Italian election and political uncertainty, but more that the market is digesting the possibility of Italy exiting the euro zone.
According to the research firm Sentix, a measure of Italy’s potential to withdraw from the currency union within the next 12 months has jumped from 3.6% in April to 11.3% in May.
This also pushed the disintegration index across the euro zone to 13%, the highest level in more than a year.
"The difficulty of forming a new government in Italy and the prospect of the coalition and the five-star movement forming an anti-euro coalition have aroused investors' vigilance," said Manfred Huebner, managing director of Sentix.
The European political crisis is heating up, boosting demand for safe havens – USD/JPY has fallen sharply, falling to a low of more than a month at 108.41, while safe-haven gold has risen above 1300 in one fell swoop, with a maximum of $1306.24/oz!
Italy's bond market has been sold out franticly – Italian 10-year bond yields have soared by 76 basis points to 3.44%; Italian 10-year Treasury yields have been higher than comparable US Treasury yields for the first time in more than a year...
U.S. 10-year yield fell 12 basis points to 2.80%, hitting a one-and-a-half month low, due to strong demand for hedging; German 10-year Treasury yields fell 13 basis points to 0.21%, the lowest since April 2017!
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