Politics remain a hot topic in financial markets with the Italian-EU budget clash ahead of the official budget submission to the EU on 15 October and the ongoing UK Conservative Party Conference, which ends today. PM Theresa May is scheduled to speak today. Italy will reduce its budget deficit to 2 percent of gross domestic product (GDP) by 2020 from the earlier announced 2.4 percent, local newspaper Corriere Della Sera reported, a pledge that boosted the euro. The single currency has been rattled by concerns that a significant increase in the Italian budget will deepen the country’s debt and deficit problems, and by extension those of the European Union. Investors will be waiting to see what happens with the Italian situation in Europe, as headlines will be primed to drive major pairs today with plenty of mid-tier data on the calendar but Germany, one of Europe’s largest markets, out for the day.
Moving ahead, today’s economic docket, featuring the final version of the Euro-zone services PMI prints, which along with the ADP report on private sector employment and the release of ISM non-manufacturing PMI from the US will be looked upon for some meaningful trading impetus. Several FOMC members including Fed Chair Powell are scheduled to speak today but they are unlikely to send any new signals, as the Fed has indicated that it is on autopilot until the neutral rate of 3.0% is reached.