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

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.

Oil prices rebounded after their "black" Friday, the chances of survival of the recently sealed British Brexit deal and the renewed tensions between Russia and Ukraine also occupied the traders, but it is Italy who 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 .FTIT8300 really jumped 5.3%, which allowed him to know his best day since June. [.EU]while Italian short-term borrowing costs fell sharply in the bond markets to 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, Credit Suisse Wealth Management's European Strategy Officer.

"You can potentially go 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 13737 USD = and up 0.7% to 128.90 yen EURJPY = EBS, but it declined briefly when the Ifo monthly survey in Germany revealed a larger than expected decline in corporate morale.

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

The pound sterling, GBP =, also rose against the dollar after the UK and the European Union reached an agreement on Britain's plans for Brexit on Sunday.

EURGBP = and analysts remain cautious about the fact that the Brexit deal faces stiff opposition from the UK parliament, which will vote on the agreement in about two weeks. [GBP/]

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

"The failure of the pound sterling in the face of recent positive developments suggests that the market takes into account that the deal will not be passed for the first time in parliament," said Lee Hardman, an exchange analyst 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, during which the S & P 500 index reached its lowest level in six months, down more than 10% compared to the peaks of September, and pushed it back into "fix" territory. [.N]

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.

The latest Brent crude futures contract, LCOc1, is set at $ 60.15 a barrel, up 2.3% in London. Futures on US CLc1 crude reached $ 51.23 a barrel, up 1.6% on that day and a low of $ 50.15 on Friday.

Overnight in Asia, the largest MSCI equity index in the region, excluding Japan .MAPJ0000PUS rose slightly by 0.6%, mainly in Hong Kong and Taiwan, while Japan's Nikkei .N225 advanced 0.8%.

In China, however, the Shanghai Composite Index .SSEC fell 0.1% and Bitcoin BTC = BTSP extended its recent falls, falling more than 5% from the day's highs, while cryptocurrencies have 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.