Talks about the fact that the two populist parties in Italy are developing an agreement on a coalition government, can undermine the strength of the euro, gaining momentum.
Some analysts believe that the new government may require the European Central Bank to write off a significant part of the country’s debt, which could seriously affect the position of the European currency on the world market.
It should be noted that contrary to the weak economic growth of the eurozone in the 1st quarter of this year, many investors are optimistic about the plans of the European regulator to reduce, or even complete, the bonds redemption programs.
From a political point of view, attempts can also be made to prevent further European integration from the new government of Italy.
In the medium term, despite the large growth potential of the euro, such news will play the role of a deterrent mechanism.
The Russian ruble ignored the new demands of US President Donald Trump to Germany. The connection of the Russian ruble is seen through Trump’s proposal to make concessions to the EU and refuse to introduce fees if Germany, in turn, refuses to support the Nord Stream-2 project, which provides for the construction of a pipeline to deliver gas from Russia through the Baltic Sea.
With such a demand, the US president turned to German Chancellor Angela Merkel. It should be noted that tomorrow the German Chancellor is scheduled to meet with Russian President Vladimir Putin, where the further construction of the gas pipeline will be discussed.
If Germany does not make concessions to the US, then from June 1 this year, the EU will introduce duties on the import of steel and aluminum, which will unleash a major trade war.
It is also worth noting that the Chinese authorities also faced a similar problem.This detail was discussed in the morning review. Most recently, a delegation from China arrived in the United States, led by Vice-Premier of the State Council of the People’s Republic of China Liu He. The main purpose of the negotiations is an agreement that will allow to weaken sanctions from the US against ZTE in exchange for softening the position of China regarding duties on American agricultural products.
In the second half of the day came data on the US labor market, which slightly affected the rate of the US dollar.
According to the report of the US Department of Commerce, the number of initial applications for unemployment benefits in the US for the week from 6 to 12 May increased by 11 thousand to 222 thousand. Economists predicted that the number of applications will be 215 thousand.
Initial applications for unemployment benefits in the US for the week from April 29 to May 5 were not revised, and remained at the level of 211 thousand. Secondary applications for unemployment benefits in the US for the reporting week decreased by 87 thousand, to 1.707 million.