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Analysts at ANZ noted the key developments in today’s Europen markets.

Key Quotes:

“Overnight Draghi said that the euro area is performing well and he expects the broad based expansion to continue. He said Brexit is an important source of potential instability that they are monitoring closely. He noted that the ECB keeps a lot of optionality in their policy guidance and that if the outlook deteriorated, they could change their forward guidance.

EXPORTS DOWN:

German exports fell in September, down 0.8% m/m, compared with expectations of a 0.4% rise. This contrasts the more upbeat factory orders and services PMI earlier this week. The Bundesbank says the Q3 slowdown was due to temporary difficulties in the auto industry and expects a rebound. But if trade tensions escalate, softness could linger.  

DANGEROUSLY CLOSE:

Italian bond yields increased overnight after the Finance Minister said the EU commission’s forecasts for Italy were “inadequate and partial analysis”. He added that the EU ignored “clarifications provided by Italy”. This comes as the EU warns that Italy’s budget deficit will move dangerously close to the bloc’s limit of 3%.