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XTB TRADEBEAT

Stocks plummet on Italian political concerns

Summary:

  • Political turmoil in Italy sinks European stocks
  • US stocks also threatening to break lower
  • Gold experiences volatile trade around the 1300 
  • Ethereum looks to recover from large losses

It’s been a big down day for many markets with heightened concerns surrounding the latest political developments in Italy threatening to cause a pretty widespread fallout. The basic premise behind the worries is that fresh elections will now take place in the EU’s 3rd largest economy, with the 5 star party potentially pursuing a more eurosceptic mandate. Furthermore these elections could take place as soon as the end of July.    

 The ITA40, is obviously the most sensitive to these developments, but they are also keenly felt in the DE30 and EURUSD, with the latter falling to a 2018 low in the low 1.15s today. A video looking at these three markets and key levels to watch can be found here

The potential disruption that this could cause throughout the EU has seen other markets impacted with Asian equities ending lower and the US trading in the red on the European close. The US500 has fallen to a 2-week low today and unless there’s a decent recovery before the day is out then the market could be set to provide a daily breakout signal.

The Italian story has dominated the day’s trade and Gold has experienced a volatile ride. The precious metal surged higher as stocks were falling this morning, before reversing and dropping sharply itself. On the European close buyers seem to be pushing ahead once more and the market could now be set to test the top of its daily range once more. In terms of economic release the latest consumer confidence reading from the US cooled slightly, but this is of secondary importance compared to the Italian story as far as Gold traders are concerned at present.

 Crypto markets are bucking the trend and enjoying a big push higher today with Ethereum the top riser and higher by more than 7%. Yesterday saw a large decline in Ethereum, with price sliding around 14% with some analysts specializing in cryptocurrencies suggested that Ethereum could have dropped on the back of the dump of Ether by initial coin offerings (ICOs) and other similar projects.

 

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