Investors and traders are nervous on Italian budget news
There's a hint of a risk off tone in markets right now with equities trading lower while bond yields are also slipping. The fall in Treasury yields have helped to put a bid in the yen but the usual suspects in the currencies space are also making their moves in a typical risk off scenario.
The aussie and kiwi have been weighed lower while the dollar is among the beneficiaries in all of this. Meanwhile, the direct involvement of the euro to Italy's debt situation has seen the single currency also underperform at the start of the session with EUR/USD threatening a break below the 1.1700 handle now.
And all this comes from just one headline that the budget meeting today may be postponed. Imagine what would happen if finance minister Tria resigns and the deficit target is set to something around 2.4% to 2.5%. The knee-jerk reaction lower in the euro would be something to watch out for if that happens.
Forget about the Fed, it's going to be all about Italy in the session ahead.
