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Weekly Focus: Italian Reprise

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Fundamental analysis of Forex market

Market movers ahead

  • The focus in the euro area next week will stay on Italy and the ongoing budget fight. Italian government bonds have come under renewed pressure, as the risk of a new debt crisis in the medium term looms.
  • The next focal date for markets will be 15 October, which is the deadline for the Italian budget draft to be presented to Brussels.
  • We expect to see US September CPI figures climb higher to 2.3% y/y. In addition there will be a number of interesting speeches from Fed members.
  • In China, trade data will shed more light on the effects of the trade war
  • In Sweden, we expect inflation figures to come out significantly lower than the Riksbank forecast. In Denmark, September inflation is expected to decline.

Global macro and market themes

  • Global growth is slowing, but inflation pressure is rising.
  • US bond yields hit a new high.
  • Italy reignites debt crisis fears.
  • Trump closes trade deal with Canada and Mexico, but is likely to escalate versus China.

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