The lack of top-tier market events during the Memorial Day holiday in the U.S. kept traders focused on fresh political risks in the euro zone.
- U.S. markets closed for Memorial Day
- Italy’s 5-Star Movement looking to impeach Mattarella?
- Spanish PM Rajoy to face vote of confidence on Friday
Political shakeups in Europe
Just when it seemed that Italy was getting its act together and appointing the new members of cabinet, the latest developments threatened top leadership positions.
In case you need a bit of help catching up, check out my buddy Forex Gump’s Quick Primer on Italy’s Political Situation.
As summarized in my earlier session recap, current Italian President Sergio Mattarella appointed former IMF official Carlo Cottarelli as interim PM. This comes after his earlier PM appointee Giuseppe Conte resigned when his pick for economy minister, Paolo Savona, wasn’t endorsed by Mattarella.
As you can imagine, the backlash on the already shaky coalition government was severe, leaving the head of the 5-Star Movement to consider impeaching Mattarella.
With Italy possibly going back to the polls, many are worried that this could give anti-establishment parties a stronger mandate. Either way, the uncertainty isn’t doing the shared currency any favors as Spain’s PM gears up for a vote of confidence later this week.
Major Market Mover(s):
The euro was understandably on shaky footing in the London session and things didn’t get any better as the day went on.
EUR/USD went on with its slide to a low of 1.1607, EUR/JPY edged from 127.67 to a low of 126.87 before pulling up slightly, EUR/GBP dipped to .8733, and EUR/AUD is down to 1.5404.
Surprisingly, the dollar managed to pocket a few pips over the past few hours, even though most U.S. traders were off enjoying the bank holiday.
AUD/USD slid from .7564 to .7539, USD/CAD advanced to a high of 1.3023, GBP/USD fell to 1.3323, USD/JPY ticked up from 109.35 to 109.47, and USD/CHF popped to a high of .9959.
Watch Out For:
- 11:30 pm GMT: Japanese unemployment rate (no change from 2.5% expected)