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Markets calm thanks to suspended Renzi resignation


Brexit and the fallout from the Italian referendum continued to dominate proceedings, though dominate perhaps isn’t the right word given how mild things have been. The FTSE fell by around 20 points, keeping it under the 6750 mark, thanks to a wobbly commodity sector and a gradually gaining pound. Sterling’s slight growth this morning has seen it hit a two month high, largely due to the fact that Philip Hammond has claimed Britain wants to ‘keep all options open’ when negotiating the country’s EU divorce.

With the euro giving up some of yesterday’s surprising growth (it has slipped 0.1% against the dollar and 0.3% against the pound) the Eurozone indices were perkier than their UK peer this Tuesday. The DAX just about kept its head above 10700, while the CAC managed a solid 0.4% climb. The region has been helped by the fact that soon-to-be-former Italian Prime Minister Mario Renzi has decided to stay on until after the country’s budget is passed in a few days, ensuring some semblance of stability as Italy undergoes its latest governmental shift. A potential Monte dei Paschi bailout this weekend has also helped calm the markets, making the referendum the most swiftly dealt with of 2016’s major political moments.

Looking to the afternoon and the US session continues Tuesday’s trend of offering little for investors to chew over, leaving the Dow futures facing a rather flat open after the bell. The one number of note is the US factory orders reading, expected to climb to 2.5% from 0.3% month-on-month.

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This article does not constitute investment advice. Do your own research or consult a professional advisor.

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