Market movers today
The key focus in the financial markets will be on the next steps in the Italian political drama after yesterday's sell-off, which is increasingly impacting global financial markets. The former IMF employee Carlo Cottarelli is due to go the president's office, most likely to acknowledge that he cannot form a government. This opens the possibility for new elections or renegotiations for a Five Star/League coalition government.
be on possible Chinese reaction to the US announcement that the US will impose limits on Chinese tech investment and go ahead with 25% tariffs on Chinese imports.
In terms of economic releases, the US PCE core in April is due out. Based on CPI, PCE core rose +0.1% m/m in April, which would lower the inflation rate to 1.8% y/y from 1.9%. We still believe there are upside risks to US inflation, as the total policy mix has become easier.
German inflation is due for release, in advance of the euro area figure tomorrow.
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