IIFT Daily Note with Peter Brown

Two major political problems.

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Firstly Italy. Confidence vote scheduled for Wednesday. Italy is important because it is too big to fail and cannot be bailed out. This turmoil exists in Italy all the time but another election will stall reform and make the Euro Zone market nervous. Add to this the failure of congress to agree over the weekend and we may have the perfect storm. You need to research both these issues as they will dominate the week ahead. Not enough space to go into the detail here.Euro dollar is pulled both ways negative on Italy weakening the Euro, the US situation weakening the dollar. So the simple action may be in the socks or gold.

We are quite a bit lower across Europe and the US on the indices. But this market will stay negative for the week. So a sell on rallies is best.

We may get a bit of a bounce at open because we are so low. But volatility is back that is for sure.

Levels today are  Euro 1.3560  1.3460  S&P 1680  (The Gap to Friday close) 1670 support.  Gold should be well supported.

Watch for the open but be careful we are a long way down.

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