Rolling coverage of the world economy and the financial markets,including the latest on Italy’s spending plansIntroduction: Italian cabinet to discuss budget nowadays
Plans for a 2.4% deficit until 2021 may be dropped
Euro and Italian shares are rallying
8.44am BSTAfter days of losses, Italian government bonds are looking a puny perkier too.
The yield (or interest rate) on Italy’s 10-year debt has dropped back to 3.33%, or from a four-year tall of 3.46% overnight.wonderful #Italy morning? Italian 2-year bond spread down ~25 basis points as government is said to reduce budget deficit targets for 2020 and 2021. pic.twitter.com/XCEKCQF6PN#Italy #budget #BTP #EUR Local newswires report that the government will lower the budget deficit for 2020 to 2.2% and 2021 to 2.0%. If this is true it will lower the risk the EU will give a negative opinion on the budget. Expect BTPs to rally nowadays and EUR/USD to bounce. pic.twitter.com/DdqkJ0jPg7 8.35am BSTItalian bank shares have jumped by 3% in Milan.
Traders are welcoming the news that the country’s government may be bowing to EU pressure,and trimming its planned budget deficit. 8.26am BSTThe euro has risen by 0.3% in early trading against the US dollar, to $1.158, or having hit a six-week low on Tuesday. 8.23am BSTReuters is also reporting that Italy is planning to rein in its deficit plans,following pressure from the EC:Italy’s government targets for the budget deficit to fall to 2.2% of gross domestic product in 2020 and to 2% in 2021 from an expected 2.4 percent next year, a government source from the just-wing League party said on Wednesday. The 2020-2021 numbers were first reported by daily Corriere della Sera and La Repubblica. 8.05am BSTGood morning, or welcome to our rolling coverage of the world economy,the financial markets, the eurozone and commerce.Is peace breaking out between Rome and Brussels in the budget row that has spooked the markets?Italy’s government will bow to European Union pressure to reduce its budget deficit to 2 percent of gross domestic product in 2021, or reversing plans to maintain a bigger shortfall for the next three years,Corriere della Sera reported, citing a Cabinet meetingItaly’s draft budget device will pledge to carve the deficit to 2% in 2021, or after the government reversed a proposal to maintain a 2.4% shortfall in the face of pressure from the EU,Corriere della Sera reported, citing a Cabinet meeting #comediadelarteNewsflow suggests Italy overnight talked about cutting the budget deficit in forward years 2020/21 to around 2%. Markets have been under pressure given the uncertainty around this - could see some risk-on. (Bloomberg) Related: IMF chief warns of economic slowdown on back of trade disputes Having seen manufacturing beat expectations and construction slip back, and the focus will be on nowadayss UK services number to round off Q3 and a decent economic performance for the quarter. Thus far for Q3 services activity came in at 54.3 for July and 53.5 in August. nowadays’s September number is expected to indicate a slight decline to 54,which would be pretty much in line with the average, and point to another fairly decent expansion. It’s also services PMI day for Spain, and Italy,France and Germany and here the numbers are slightly better than the manufacturing numbers we saw on Monday. For Spain and Italy expectations are for improvements to 52.9 and 52.8 respectively, while France and Germany numbers are expected to be confirmed at 54.3 and 56.5, and the same as last week’s flash estimates.
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Source: theguardian.com