• Reserve Bank of Australia rate decision on Tuesday
  • European GDP release on Wednesday
  • Bank of Canada rate decision on Wednesday
  • European Central Bank rate decision on Thursday
  • US nonfarm payroll numbers on Friday

Euro sitting flat after European headlines

Parliamentary elections in Italy delivered huge victories for populist parties, leaving no clear path for a new government.

Italy’s anti-establishment parties made big gains in the election, suggesting a hung parliament. This will call for tense negotiations led by Italian President Sergio Mattarella for the formation of a new government.

Right-wing nationalist party Northern League accumulated 37% of the votes, becoming the main conservative party in Italy. The country, once led by three center-left prime ministers, is continuing to go into deep political uncertainty and instability, which is unnerving for the E.U.

Germany, on the other hand, will finally have a government after a six-month period of uncertainty. Prime Minister Angela Merkel has her work cut out for her as many of the parties are still widely split after she tried and failed to form a coalition with the Green and Free Democratic parties. Still, Merkel has made it clear she would work quickly to secure jobs and prosperity in the E.U.

Plenty of data to make the greenback skip

As U.S. nonfarm payroll numbers are set to be released this coming Friday, many are focused on how President Trump’s tariffs will play out.

Trump made it clear that he considers the U.S.’ trade deficits with Mexico and Canada a bad deal. The tariffs feature a hit of 7.7% on aluminum and 24% on steel. The U.S. is expected to attempt to pull out of NAFTA if revisions are not made. Experts believe this move by the President could call for trade wars that would kill American jobs and reduce global trade.

Markets this morning focused on the greenback which has shown a decline across the majors. Eyes will be on U.S. market reactions to Trump’s push for new tariffs.