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Italy remains the focal point in financial markets with large intraday movements in European fixed income markets observed yesterday and also in major EUR crosses, e.g. EUR/USD and EUR/CHF, points out the research team at Danske Bank.

Key Quotes

“The German government also spoke on the matter, with the German Finance Minister Scholz quoted as saying ‘I know that the Italian people are very pro-European’, in a Bloomberg Television interview in Berlin  on Tuesday. ‘So I think we could be optimistic, though there is a political debate about building a new government. But this is something that will not change the more pro-European approach of the Italians.'”

“The US market has also undergone a vast repricing over the past couple of days with the 10Y US yield falling close to 2.80% yesterday – about 30bp from the peak. In addition, US equity markets tracked the decline in European equity markets yesterday, falling around 1-1.5%.”

“Saudi Arabia, Kuwait and the UAE are said to be planning to meet  on Saturday  to discuss a new strategy for the oil market ahead of the  22 June  regular OPEC meeting. The news follows comments from Saudi Arabia and Russia last Friday that they will propose OPEC begin raising crude output from H2.”

“In the US, a timeline for imposing USD50bn in import tariffs on China was laid out yesterday. A final list of covered imports is planned to be released by  15 June  and imposed afterwards. Proposed restrictions on investments and export controls will announced on  30 June  and implemented afterward.”