Markets: Focus on Italy, Brexit and the coming ECB meeting – Danske Bank

Analysts at Danske Bank suggest that with no big data in the calendar today, markets will continue to focus on Italy, Brexit and the coming ECB meeting on Thursday.

Key Quotes

“Today around noon, the Italian government is expected to respond to the EU letter last week in which the European Commission called the breach of the budgetary rules ' unprecedented in the history' of the European Union. We expect to see some relief in Italian markets today after the EU Commissioner Pierre Moscovici said ' that the EU wouldn't interfere in the new government ' economic policies '. Although Moody's downgraded Italian debt one notch on Friday to Baa3, it set the outlook assessment on 'stable', which eased the fears of Italy being downgraded to junk.”

“On Brexit, today Prime Minister Theresa May is set to outline progress in the talks to the Parliament. According to remarks emailed by her office, she will say that '95% of the Withdrawal Agreement and its protocols are now settled'.”

“Later this week, focus turns to euro Flash PMI (Wednesday), the ECB meeting (Thursday) and the first US estimate for GDP in Q3 (Friday).”

“In the Nordics this week, the key events will be the Riksbank meeting (Wednesday), as well as projections from the Swedish Debt Office (Thursday) and the Norges bank meeting (Thursday).”