Italy has agreed to take a more disciplined approach towards its budget.
The Italian government pledged to curb spending by 2020, pushing the yield on the country’s 10-year bonds. After hitting a four-and-a-half-year high yesterday, 2 October the interest rate on the Italian debt dropped by 11 basis points in a shift in investor sentiment.
In the UK, with Brexit still high on the agenda, Prime Minister Theresa May struggles to contain the rebellion within her party. Speaking at the Conservative Party conference in Birmingham yesterday, Boris Johnson resumed his attack on May, urging her to “chuck” her Chequers plan.
Attention today, 3 October will turn to the health of the US labour market as the Automatic Data Processing (ADP) will release the latest figures on new workers. Economists forecast 185,000 new employees would have been added to the labour force. Any number above that will strengthen the greenback further.
Finally, Jerome Powell is scheduled to speak tonight at 21:00 (GMT). Last night the Federal Reserve Chair told the National Association for Business Economics in Boston that rising US wages did not suggest the country’s jobs market was overheating and defended the central bank’s cautious approach to monetary policy tightening.
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