European Economy

DXY ground higher last night as EUR fell: AUD managed a weak bounce against DMs: And EMs: The yuan free fall is rapidly assuming epic proportions: Gold is in trouble: WTI is on fire: Base metals are worrying.

And I’m not talking about soccer, via the FT: Italy’s new populist government demanded the EU rip up its system for dealing with migrants at a mini-summit in Brussels on Sunday that laid bare divisions in the bloc over migration policy and piled pressure on German chancellor Angela Merkel.

Via FTAlphaville: Following a turbulent week a fortnight ago, markets have calmed and were further assuaged by new finance minister, Giovanni Tria, saying on Sunday that “we are not discussing any proposal to exit the euro.

Oh yes, from Elliot Clarke at Westpac: The past week has, yet again, emphasised the fragile nature of European politics and the Continent’s growth narrative.

Markets!

Via Damien Boey at Credit Suisse: Pandemonium in bond markets Overnight, Italian political deadlock caused: 1.

Via Damien Boey at Credit Suisse: More chaos in Italian politics and bond markets Italy’s prime minister-designate Conte has given up on his mandate to form a populist coalition government after talks with President Mattarella collapsed.

Via Damien Boey at Credit Suisse: Europe is slowing Recent European data have surprised materially to the downside.

Here’s the chart to lead us off: That’s what a tearaway currency will do to you.

Via Westpac: ECB President Draghi and the Governing Council were both subtle and direct in March, both with respect to their own economy and evolving global conditions.

The polls are not kind to Italian support for the EURO: However, Scope Ratings is sanguine: An important concern of many market participants is the euro exit debate in Italy, pushed by the platforms of euro-sceptic groups like M5S and Lega.

The European Central Bank (ECB) released their latest policy outlook last night and it set a fire under the Euro as the language within had gotten decidely more bullish.

Via Westpac’s today Elliot Clarke: The second estimate for Euro Area GDP confirmed a 0.6% gain for the September quarter.

Via Deutsche: Why is the referendum illegal?

It had better not because it is leaving Spain: Catalonia will move on Monday to declare independence from Spain after holding a banned referendum, pushing the European Union nation toward a rupture that threatens the foundations of its young democracy.

The German election has gone much as expected but is still shocking markets, via the BBC German Chancellor Angela Merkel has been re-elected for a fourth term while nationalists have made a historic breakthrough in federal elections, exit polls suggest.

A few months ago, French president Emmanuel Macron launched a new policy platform to protect France’s lowest paid from foreign competition: Emmanuel Macron warned Europe must accept the UK was crashing out of the bloc because of worries about foreign workers undercutting wages.

Via Macquarie: The business cycle in the Eurozone We forecast growth in the Eurozone to be 2.1% YoY this year, the highest since 2001.

by Chris Becker An interesting study on the motivations and causes behind the shock Brexit vote which suggests a lack of higher education.

By Leith van Onselen For more than a decade, the Productivity Commission has debunked the common myth that immigration can overcome population ageing. For example: PC (2005): “Despite popular thinking to the contrary, immigration policy is also not a feasible countermeasure [to an ageing population].

There are really four key scenarios that can occur in this Sundays (Monday morning for us Aussie’s) French election and they could really shape the performance of markets like EUR/USD (and EUR crosses), France 40 cash and more indirect markets such as the ASX 200, FTSE 100 cash and gold.