The euro jumped above $1.07 for the first time since mid-November on Monday, rebounding around 2 cents after hitting 21-month lows after Italy's prime minister conceded defeat in a referendum on constitutional reform and said he would resign.
European stocks and the euro rose on Monday, battling back as investors bet that Prime Minister Matteo Renzi's resignation after voters rejected his constitutional reforms would not trigger a snap election in Italy.
If this were baseball, I am batting 500. As of Sunday night, the "No" vote in Italy was well ahead, and by Monday morning the winner, which I anticipated. I was not so certain about OPEC coming to a deal. I’m still skeptical it will remain sustainable. But to give you an idea, the Saudis and Iranians worked out a deal where the Saudis will cut 4.6% of their output per day while the Iranians only 2.3%. Keep in mind the Saudis are producing (round numbers) 10 million barrels a day while the Iranians nearly 4.
Crude oil prices, like the rest of the global markets, are shaking off the Italian “No" vote on constitutional reforms and Italian Premier Matteo Renzi announced resignation and instead are focusing on growth and OPEC production cuts. After opening lower, the global markets came roaring back as it might not be all bad that Italy is seeking change.
The dollar gained ground against the yen on Tuesday after a roller-coaster 24 hours which traders say may just be a precursor to three weeks of risk-packed events for the $5 trillion a day currency market.
The European Central Bank is ready to temporarily step up purchases of Italian government bonds if the result of a crucial referendum on Sunday sharply drives up borrowing costs for the euro zone's largest debtor, central bank sources told Reuters.
Global stocks hit their highest in almost a year today as investors pared back expectations of when U.S. interest rates would rise, although a fall in bank shares after stress tests took the shine off European shares.
Central banks from Washington to Tokyo take center stage next week, although policymakers are likely to remain cautious as they wait for the dust to settle from Britain's shock vote to leave the European Union.