Nov 26, 2018, by Lorcan Roche Kelly
Italian bonds and stocks are surging this morning after both parties in the governing coalition signaled a willingness to compromise on the budget-deficit target, an issue that sparked a standoff between the government and the European Commission in recent weeks. Yields on Italy’s two-year bonds fell as much as 31 basis points. British Prime Minister Theresa May managed to overcome a last-minute hurdle over Gibraltar to get a deal agreed on the U.K.’s exit from the European Union with her counterparts in Brussels. The next challenge for May is to get the deal through her own parliament, which is far from certain.
Finding a floor
A barrel of West Texas Intermediate for January delivery was trading at $51.08 by 5:45 a.m. Eastern Time as the commodity halted the decline that saw a 7.7 percent slump on Friday. With Saudi Arabia pumping as much as 11.2 million barrels a day, President Donald Trump calling the price drop “so great” and concerns about a supply glut rising, time will tell whether this morning’s move is a pause in the crude-price plunge — or a new floor.
Ukraine’s parliament will vote on whether to impose martial law after Russia fired on its warships Sunday, sparking a dramatic renewal of tensions between the former Soviet states. A move by Kiev to limit freedoms could delay next year’s presidential ballot and comes at a delicate time as the International Monetary Fund considers unlocking as much as $1.5 billion from the next slice of its loan program. International leaders have called on Russia to return three Ukrainian vessels that were seized during yesterday’s confrontation.
Overnight, the MSCI Asia Pacific Index climbed 0.5 percent while Japan’s Topix index closed 0.2 percent higher with technology stocks among the best performers. In Europe, the Stoxx 600 Index was 1.1 percent higher by 5:45 a.m., with Italian stocks by far the morning’s biggest gainers. S&P 500 futures pointed to a jump at the open, the 10-year Treasury yield was at 3.063 percent and gold gained.
The tumble in digital coins worsened over the weekend, with Bitcoin falling as low as $3,475 yesterday before recovering some of those losses to trade at $3,944 by 5:45 a.m. It is unclear what, if anything, will halt the bursting of the Bitcoin bubble. Holders of cryptocurrencies seem to be pinning their hopes on institutional investors coming in to save the day.