Political upheaval

Investors have started the week with geopolitics to the fore. U.S. negotiations with North Korea have proved unpredictable, and political turmoil in Italy and — to a lesser extent — Spain have refreshed memories of the euro zone’s woes of the past decade. Pro- and anti-European forces are at loggerheads in Italy where another election is expected as early as September after parties have failed to form a government since a March poll. The commodity-linked Aussie and Kiwi traded on the back while Loonie was better bid amid news of the Canadian Trans Mountain pipeline deal.

Despite full markets returning, we have little of note to report in the European session, except for the Swiss trade figures and Eurozone money supply data. However, the political drama around Italy and Spain will continue to drive the market moves in the session ahead. Among the central bankers’ speeches, we have the ECB policymakers Mersch and Lautenschlaeger up on the rostrum later today while the US Dallas Fed manufacturing index and CB consumer confidence data will offer some fresh trading impetus in the NA session ahead of the Reserve Bank of New Zealand’s (RBNZ) Financial Stability Report due to out at 2100 GMT.