Italian debt is proving to be a major concern for the Eurozone. The European Union will aim to fix the situation, but it may be the case there will be no escape from the debt crisis.

Currency Pair% Change (Month)Difference on £200,000
GBPEUR2.14%€4,220

Financial Firm TS Lombard believe it seems to be a matter of “when” rather than “if” another full blown sovereign debt panic will happen. It could be the case the Italian government is positioning itself to demonstrate to its voters that it has not sought to leave the Eurozone, but rather the Eurozone is leaving Italy. Italy could be potentially getting ready to inform the EU it has had enough. Then the Italian government could inform the public that the EU is to blame for Italy’s economic woes.

This has the potential to hit both the stock market and the currency market in a serious fashion. There could be a far bigger market reaction than when the Greek crisis hit the markets a decade ago. Italy’s economy is ten times the size of that of Greece and is the eighth largest economy in the world.

US Consumer Price Index today

Eurozone CPI data

Eurozone Consumer Price Index (CPI) figures are released tomorrow. CPI is a measure of inflation and is a key barometer as to the health of country’s economy. Inflation is a major concern in the Eurozone as it has been stated by the European Central Bank (ECB) if inflation continues to fall below expectations there could be a cut in interest rates bringing interest rate levels into a negative position.

Year on Year data is expected to have little change and land at 1.2% and month on month is set to see an increase from 0.8% to 1%. If data lands away from expectations, we could see some market movement.

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