• EUR, EU equities and BTPs hit as Italian budget targets seen as a “serious concern” for the European Commission
• China returns with a RRR cut, but can’t stop the rot for Chinese equities and the CNH
• Looking ahead the highlight is ECB’s Nowotny; NOTE: US Columbus Day is today, US equity markets are open

ASIA

Asian stocks traded on the backfoot as the region mimicked the lead from Wall St. where the S&P 500 posted its worst week in nearly a month...

Asian stocks traded on the backfoot as the region mimicked the lead from Wall St. where the S&P 500 posted its worst week in nearly a month

The Telegraph reports The EU is preparing to offer Theresa May a “supercharged” free trade deal this week but will reject Mrs May’s demands for frictionless tradee

The Telegraph also reports that Brexiteers offered UK PM May a lifeline that will see EU officials based at UK borders

Brazilian far-right candidate Bolsonaro won the first...

Week In Focus; week commencing 8 October 2018

Sunday: Brazilian Election

Monday: Chinese Caixin Services PMI, Eurozone Sentiment Index

Tuesday: Japanese Current Account

Wednesday: Australian GDP, US PPI, UK Monthly GDP, Production & Trade Balance

Thursday: US CPI, Japanese PPI, ECB Minutes

Friday: Eurozone Industrial Production, Chinese Trade Balance, Pastor Brunson court decision, US Banks kick off US earnings season

ITALIAN BUDGET

Last week...

GBP gets a lift from EU sources stating a divorce deal is “very close” temporarily breaking 1.3050 to the upside

BTP’s down by over a point as Italy cut GDP growth targets and Salvini maintains his anti-EU tone

EU equities on the back foot as Italy, yields and US-China tensions weigh ahead of NFP

Looking ahead, highlights include, US and Canadian jobs reports, US trade, Baker Hughes, ECB’s de Guindos, Fed’s Kaplan, Williams and Bostic

ASIA

Asia-Pac...

Asian equities trade mixed following a negative lead from the US with sentiment on Wall St. dampened by ongoing trade concerns and US yields

FX markets were little changed overnight with the greenback remaining in a tight range ahead of NFP

Italy's Finance Minister Tria is targeting GDP growth of 1.5% in 2019, 1.6% in 2020, 1.4% in 2021 and confirmed deficit/GDP target of 2.4% in 2019, 2.1% in 2020 and 1.8% in 2021

Looking ahead, highlights include RBI rate decision, US and Canadian jobs...

• US 10-year yields hit 4 year highs as markets react to a hawkish Powell
• Positive vibes from EU sources on the new Irish backstop proposal lifts Brexit spirits and the GBP
• Looking ahead, highlights include, weekly US jobs data, US factory orders, Banxico rate decision, Fed’s Quarles and ECB’s Coeure

ASIA

Asia-Pac stocks traded mostly lower despite the positive lead from Wall St as the effects of rising rates...

• Asia-Pac stocks traded mostly lower despite the positive lead from Wall St as the effects of rising rates spooked investors
• In FX markets, the greenback hit a one-month high following upbeat comments from Fed Chair Powell on the economy
• Italy's government agreed on a 2.4% deficit/GDP target in 2019, 2.1% in 2020 and 1.8% in 2021, PM Conte confirmed
• Looking ahead, highlight include, weekly US jobs data, US factory orders,...

• Italian Economy Minister tries to tame budget excesses ahead of key meeting
• BTPs firm but off peaks as Di Maio maintains citizens income demands
• Looking ahead, highlight include, US services PMI, US ADP, ISM non-mfg, Fed’s Barkin, Harker, Bullard, Brainard and Mester

• Italy are said to seek cuts in their 2021 and 2020 deficit/GDP ratio to 2.0% and 2.2% respectively from 2.4%
• EUR immediately caught a bid as the reports signal a potential compromise from Italy. Asian stocks traded choppy following a mixed lead from Wall St.
• Looking ahead, highlights include EZ, UK and US services PMI, US ADP, ISM non-mfg, ECB’s Mersch, Fed’s Evans, Barkin, Harker, Bullard, Brainard and...

• BTP yields hit 4 year highs and FTSE MIB underperforms after Borghi suggests Italy would be better off without the EUR
• GBP the G10 laggard after poor PMI’s and negative Brexit commentary via the Tory conference
• Looking ahead highlights include, US APIs and potential comments from BoE’s Haskel, Fed’s Quarles, ECB’s Villeroy, Fed’s Barkin, Powell, and BoE’s Haldane

• Asian stocks traded mostly lower as the upbeat sentiment from the USMCA deal seen on Wall St. faded away
• UK PM May is preparing to limit Britain's ability to strike free-trade deals after Brexit in a significant concession to the EU aimed at breaking the deadlock in negotiations
• The RBA stood pat on rates as expected and stated that low interest rates are supporting the economy, while business conditions and the outlook for the labour market remain...

• US-Canada-Mexico agreed to new NAFTA named the USMCA; CAD and MXN the major outperformers in FX
• FTSE MIB the outperforming bourse as Italy sees some reprieve
• Looking ahead, highlights include, US mfg PMIs, US construction spending, ISM mfg PMI, Fed’s Bostic, Kashkari, Rosengren, BoE’s Tenreyro

• US and Canada said in an official statement that they have reached a trade deal with Mexico in an agreement dubbed the USMCA (US-Mexico-Canada Agreement)
• Asian stocks traded mixed following a rather uneventful lead from Wall St. on Friday. Hong Kong and Mainland China closed due to public holidays
• In FX, focus has been on JPY weakness and CAD strength with the latter hitting 4-month highs vs. USD
• Looking ahead, highlights include...

• Italian budget fallout continues, with BTP yields above 3.15%, FTSE MIB Bank Index down over 5%, and EUR underperforming
• GBP undermined by benign UK GDP and more Brexit-related weakness in business investment
• Looking ahead, highlights include US personal income, core PCE price index, Canadian GDP, Chicago PMI, Uni. of Michigan and a slew of central bank speakers

• Asian stocks traded mostly higher following a spur in risk-appetite and an upbeat lead on Wall St
• The Italian government has reached agreement on 2.4% deficit to GDP target for 2019
• Looking ahead, highlights include German jobs, UK GDP, EZ CPI, US personal income, core PCE price index, Canadian GDP, Chicago PMI, Uni. of Michigan and a slew of central bank speakers

• Italian budget dispute takes centre stage as Finance Minister and League/5SM 2% conflict comes to the fray
• BTP roam toward 3% to the upside in early European trade and FTSE MIB leading the losses in equities
• Looking ahead, highlights include, German CPI, US GDP, Durables, Italian budget presentation and a slew of central bank speakers

• FOMC hiked rates as expected, Fed Chair Powell provided an upbeat tone on the US economy, dot plots suggested no more hikes after 2020
• UK PM May is reportedly losing support for a no-deal Brexit if EU discussions fail, according to sources
• Recent reports suggest the Italian Government may postpone their 2019 budget plan meeting while the league are set to join 5SM in seeking a 2.4% deficit target
• Looking ahead, highlights include...

• FX markets rangy and equities directionless in a quiet European morning ahead of the FOMC
• BTP’s back over 127.00 as Italian budget updates surface ahead of the official release on Thursday
• Looking ahead, highlights include, Czech, US and NZ interest rate decisions, US new home sales, ECB’s Draghi and Fed’s Powell

• Asian equities traded mostly higher despite a mixed lead from Wall St. where the Dow and S&P closed with losses
• In FX markets, antipodeans stole the limelight as an improvement in New Zealand’s business outlook and activity lifted NZD/USD to near weekly highs
• UK PM May again states that it is not in the national interest to hold another general election or second referendum
• Looking ahead, highlights include, Czech, US...

• Oil breaks USD 82.00 to the upside and hits 4 year highs as OPEC’s rhetoric continues to lift the market
• ECB’s Praet highlights there was nothing new in Draghi’s speech yesterday, EURUSD vigorously falls to as low as 1.1732
• Looking ahead, highlights include, US consumer confidence, APIs, BoE’s Vleighe, ECB’s Praet, Makuch, Coeure, supply from the US

• Asian stocks traded mixed with the region indecisive following a lacklustre lead from Wall St. where both S&P 500 and Dow slipped from all-time highs
• According to reports, the UK cabinet is said to give PM May's Brexit plan two weeks for progress
• Looking ahead highlights include US consumer confidence, APIs, BoE’s Vleighe, ECB’s Praet, Makuch, Coeure, supply from the US

• Oil up by over 2% as JMMC takes no heed to Trump’s calls for lower oil prices
• Risk sentiment takes a hit as China cancels trade talks with the US; European bourses all in the red
• Looking ahead the highlights are ECB’s Draghi speaking and the UK Cabinet meeting at 14:00BST

• Asian stocks traded lower (South Korea, Japan, Taiwan and mainland China away due to public holidays) with risk sentiment dampened after China cancelled trade talks with the US
• UK PM May’s aides have reportedly begun contingency planning for a snap election in November to save the Brexit talks; later denied by Raab
• Looking ahead, highlights include German IFO and ECB’s Draghi

• European equities pay no heed to poor EZ PMIs; set for over 2% weekly gain as trade war fear dissipate
• Sterling sliding on subpar statements after Salzburg summit
• Looking ahead, highlights include, US PMIs, Canadian CPI and retail sales, Baker Hughes Rig Count and quad witching

Asian equity markets traded higher as the region took impetus from the rally in US where the Nasdaq outperformed on a rebound in tech