A relatively quiet day for announcements sees focus shift to geo-political concerns surrounding Italy.

The EUR/USD struggled overnight, falling back below $1.15. The pair opened at $1.15221 and lifted to a high of $1.15291 early in the session. That’s about as good as it got as the pair began its decline, where it bottomed-out at $1.14585 late in the session. It bounced off those lows and has climbed to its current $1.14923 level. The GBP/USD followed a similar path after opening at $1.31188. The pair bumped up to a high of $1.31323 shortly afterwards before the slide began. The pound sunk to a low of $1.3027 mid-to-late trading before rebounding and climbing to it’s current $1.30900 level.

The Dow looked set for another negative session, until a late rally brought it back into positive territory. The index opened at 26,501.11 and remained rather flat in early and mid-session trading. The Dow then dropped to lows of 26,218.33 late in the day before a rally regained all the losses, hitting a high of 26,545.32. It is now trading at 26,521.40. The Dax was once again disappointing, weighed down by a budget stand-off between the EU and Italy. The German index opened at 12,102.74 and bumped up to a high of 12,117.30 during the opening hour. The Dax fell for most of the session, hitting lows of 11,894.10 late in the day. It bounced off those lows to close at 11,971.70.

Concerns around Italy have re-surfaced, with the Mediterranean nation at odds with EU over budgetary measures for their economy. The election of a new government in Italy has brought with it new ideas and priorities with regards to budget reform, meaning some reforms that were agreed to by the previous Italian government no longer seem palatable to this one. This has caused plenty of uncertainty for European markets, with the Italian index, the FTSE-MIB, plummeting 2.43% overnight. This uncertainty has weighed on other markets, such as the Dax. Look for these issues in Italy to continue in the near term at the very least. Data set for release today includes:

Australia – NAB Business Confidence

Japan – Current Account, Economy Watchers Sentiment

Europe – German Trade Balance

UK – FPC Statement, MPC Member Ben Broadbent speaks

US – NFIB Small Business Index, IBD/TIPP Economic Optimism

Canada – Housing Starts, Governing Council Member Carolyn Wilkins speaks

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