Elections in Italy as early as July 29th ?

1. According to media, Italy’s Democratic Party leader stated that his party would not back PM candidate Cottarelli and asked the Italian president to “immediately” dissolve parliament and hold snap elections.
2. It seems that most Italian parties favor new elections as early as July 29th , much earlier than anticipated.
3. Currently polls show that the League and the M5S combined, could sum up to 60% of the votes and come out stronger from the political crisis.
4. Further news on the instability in the Eurozone could make the EUR weaker.

BoC interest rate decision

1. BoC is to announce it interest rate decision today at 14:00 (GMT) and is expected to remain on hold at 1.25%.
2. Currently CAD OIS imply a probability for the bank to remain on hold of 89.75% and 10.25% for a 25bp rate hike.
3. Market focus could shift to the accompanying statement and it could have a neutral to dovish tone. It will be interesting to see any comments regarding the Inflation rate, private debt and the NAFTA negotiations.
4. Should there be a dovish accompanying statement we could see the Loonie weakening.

Today’s other economic highlights

• Germany: Retail Sales for April, Survey:+0.7% mom Prior:-0.6% mom, 06:00 (GMT), Could support the EUR
  Unemployment Change for May, Survey: -10k Prior: -7k, 07:55 (GMT), Could support the EUR
  Unemployment Rate for May, Survey: 5.3% Prior: 5.3%, 07:55 (GMT), Neutral for EUR
  HICP preliminary for May, Survey: +1.8% yoy, Prior: +1.4% yoy, 12:00 (GMT), Could support the EUR
• Eurozone: Final Consumer Confidence for May, Survey: 0.2 Prior:0.3, 09:00 (GMT), Could weaken the EUR
• US: ADP Employment for May, Survey: 190k Prior: 204k, 12:15 (GMT), Could weaken USD
  GDP (2nd release) for Q1, Survey: +2.3% qoq Prior: +2.3% qoq, 12:30 (GMT), Could weaken USD
  API weekly Crude Oil Stock, Survey: N/A Prior:-1.300m, 20:30 (GMT), Any reading<-1.300m barrels could support oil prices
• Canada: Current Account for Q1, Survey: -18.0B Prior: -16.4B, 12:30 (GMT), Could weaken the CAD

IronFX Daily Report ‘May 30th’