Europe rallies to Italian hopes, oil rebounds after "black" Friday By Reuters

By Marc Jones

LONDON (Reuters) – European equities, Italian bonds and the euro rallied Monday amid signs that Rome was preparing to review spending plans that left it in the dark. disciplinary action by the European Union.

A rebound in oil prices after their "black" Friday, the chances of survival of the British deal on the newly sealed Brexit and the renewed tensions between Russia and Ukraine were also occupying traders, but that 39, was Italy who had stole the show.

Deputy Prime Minister Matteo Salvini hinted on Sunday that it was possible to change the country's budget deficit target, saying that "nobody is stuck" on the goal of 2 , 4% and that signs of change continued Monday.

The index of Italian banks () really jumped 5.3%, which placed it on the best performance since June (), while Italian short-term borrowing costs have fallen sharply in the bond markets, reaching their lowest level since September. [GVD/EUR]

"This will help the banks if the BTP-Bund spread drops what it was this morning," said Pierre Bose, head of European strategy at Swiss credit (SIX 🙂 Wealth Management, said.

"You are potentially moving from a negative spiral to a more positive spiral in which you end up with less pressure on banks, greater lending capacity and better growth support."

The euro also climbed 0.3% to 1.1376 dollar () and 0.7% to 128.90 yen (), but it declined briefly when the Ifo monthly survey in Germany has revealed a larger than expected decline in corporate morale.

"The fall of the index (Ifo) is somewhat alarming," wrote Uwe Burkert of LBBW. "It was generally expected that the economic weakness of the third quarter would be corrected with a markedly positive growth in the fourth quarter."

There was also a rise for the pound against the dollar after the agreement of the United Kingdom and the European Union on the UK's plans for Brexit, Sunday.

It has, however, pulled back against the euro (), and badysts remain cautious about the strong opposition to the Brexit agreement in the UK parliament, which will vote on this deal. in about two weeks. [GBP/]

British Prime Minister Theresa May will hold an emergency meeting on Monday in her cabinet to brief ministers on her strategy to convince critics of the deal, including the Irish DUP party, which is currently supporting the government. May.

"The failure of the pound sterling in the face of recent positive developments suggests that the market accounts for the fact that the deal will not be pbaded for the first time in parliament," said Lee Hardman, a currency badyst at MUFG.

"Over the next two weeks, the pound will probably be traded with increased volatility," he added.

FRIDAY BLACK

Wall Street equity futures rallied after another negative session on Friday, recording its closest record in six months, down more than 10% from the September highs, and pushed it back in time. corrective territory. ()

The heavy oil price losses that pushed Brent to dive below $ 58 a barrel resulted in lower energy stocks. Brent, hit by growing signs of an oversupply of crude in global markets as demand dwindled, recovered the ground lost on Monday, but struggled to stay above $ 60.

The WTI and Brent futures are down more than 20% this month and, if they do not recover more this week, the losses would mark their biggest drop since October 2008.

Brent crude futures () were last reported at $ 60.15 per barrel, up 2.3% in London. US crude futures () reached $ 51.23 a barrel, up 1.6% on that day from $ 50.15 on Friday.

In Asia, the widest non-Japan (MSCI) stock index rose 0.6%, led by gains in Hong Kong and Taiwan, while the Japanese Nikkei index ( ) rose by 0.8%.

In China, however, the Shanghai Composite Index () edged down 0.1% and () extended its recent series of declines, dropping more than 5% from the peak of the day, as sales in the cryptocurrencies resumed their momentum.

Bitcoin was trading for the last time at $ 3,880 – above last year's lows of 2018, but it lost about three-quarters of its value this year.

At the same time, gold rose as fears of a slowdown in global economic growth and uncertainties surrounding the trajectory of US interest rates and trade tensions between China and China added to the attraction metal before the G20 meeting this weekend.