The euro rebounds, oil prices rise, Italy rejects Renzi’s referendum, and global markets are mixed. Here are four things to know in the market on Monday, December 5.
1. The Euro Rebounds
After falling to a 20-month low, the euro rebounded on Monday. In Asian trade, the currency hit a low of 1.0507 against the dollar.
By mid-morning, EUR/USD was up to 1.0703.
News that Italy rejected constitutional reforms in a referendum vote on Sunday sent the euro tumbling.
2. Oil Prices Rise
Oil prices climbed to 16-month highs on Monday, as investors remain hopeful that the OPEC deal will reduce the global supply glut and boost oil prices further.
Brent futures were up $0.78 to $55.31 per barrel. U.S. crude climbed 53 cents to $52.21 a barrel.
3. Italy Rejects Renzi’s Referendum
Italian voters rejected PM Matteo Renzi’s proposed constitutional reforms in a referendum vote on Sunday.
Renzi announced shortly after that he would submit his resignation to the president Monday morning.
4. Global Markets are Mixed
European markets shrugged off the referendum results and Renzi’s resignation. Initially, the euro and Italian assets were hit by news of the vote’s results, but markets and the currency quickly recovered.
Italy’s 10-year bond yield gained 2.0167%, and the FTSE MIB Index held steady.
The Stoxx 600 Index gained 1.1%. PMI data in Europe showed that the region’s economy expanded at a faster pace than expected this year.
London’s FTSE 100, Germany’s DAX and France’s CAC 40 all advanced on Monday.
Elsewhere, the MSCI Asia Pacific Index eased 0.6%. Japan’s Topix index lost 0.8%.
S&P futures pointed to a higher opening.
Market players are now looking ahead to the European Central Bank’s policy meeting later in the week. The ECB is largely expected to extend its asset-purchasing program, and hinted at increasing Italian government bond purchases.
