Things are a little confusing as financial markets are turning in differing directions. Following the speech made earlier this month by Deputy Prime Minister Salvini that new elections had to be run and that a vote of no-confidence against current government was required, PM Minister Giuseppe Conte surprised by announcing his early resignation, marking the end of the 15-months coalition composed by left-populist party Five Star Movement (M5S) and far right Lega. Henceforth, it is time for Italian President Sergio Mattarella to assess whether a new government can be formed by consulting both Parliament and political party groups until Thursday. On a side note, UK PM Boris Johnson is expected to meet with EU leaders to discuss alternatives regarding the Irish backstop, a move that should come without conclusive results and reinforce Johnson’s rhetoric that a hard Brexit is the only way, a rather negative outlook for GBP in the face of recent uprise. Despite uncertainties on upcoming events, the single currency remains unaffected by headlines while Italian BTPs are in demand as investors favor the scenario of an alternative coalition over potential general elections.


Stay on top of the markets with Swissquote’s News & Analysis


There is however good reasons to consider that general elections along end of October could take place, as the most-favored options consisting either of a new coalition composed of Luigi Di Maio M5S and Nicola Zingaretti Democratic Party could face resistance among members while a reconciliation of Salvini’s Lega and M5S is doubtful. This would leave the door opened for general elections in Q4:2019 following Matarella’s decision to dissolve Parliament and potentially provide a victory for Matteo Salvini. In this context, the European Commission 2020 budget would be postponed until a new government is formed. In addition, major rating agencies S&P and Moody’s would likely maintain their current negative outlook on Italian sovereign debt, with both ratings currently given at two notches from junk, a decision that should ultimately force investors to reassess Italian assets. As the Jackson Hole annual Symposium is expected to absorb much of the attention, the EUR will remain silent for now.

This report has been prepared by AC Markets and is solely been published for informational purposes and is not to be construed as a solicitation or an offer to buy or sell any currency or any other financial instrument. Views expressed in this report may be subject to change without prior notice and may differ or be contrary to opinions expressed by AC Markets personnel at any given time. ACM is under no obligation to update or keep current the information herein, the report should not be regarded by recipients as a substitute for the exercise of their own judgment.

Analysis feed

Latest Forex Analysis

Editors’ Picks

EUR/USD: bears pressuring, 1.0980 critical support

Risk aversion took over the FX board on Friday, weighing on high-yielding assets. The EUR/USD pair, finished the week just a handful of pips above the 1.1000 figure amid mounting tensions between the US and China.


GBP/USD: at risk of losing more ground in the short-term

The GBP/USD pair advanced up to 1.2581, it highest in over two months, but was unable to sustain gains, ending the week around 1.2470. Cable could keep losing ground on a break below 1.2460, the immediate support.


USD/JPY: at a bring of breaking lower

Fresh risk-off flows resulted in the USD/JPY pair trimming weekly gains on Friday, ending the week at 107.55. The pair barely holding above a critical Fibonacci support at 107.45. Japan’s National inflation steady at lows in August.


Top 3 price prediction Bitcoin, Ripple, Ethereum: Ethereum points to the Moon as Bitcoin takes a break

ETH/USD exceeds $220 and is bidding to lead the market. Bitcoin sets a bear trap and recaptures $10,000. XRP stalls between technical levels and fails to consolidate $0.30.

Read more

Gold climbs further beyond $1500 mark, lacks follow-through

Gold edged higher for the second consecutive session on Friday, albeit remained well within a familiar trading range held over the past two weeks or so.

Gold News

Forex Majors