The most senior EU politician Commissioner Juncker yesterday evening reminded the UK Government that the Bloc are preparing themselves for a no-deal Brexit. Juncker on this occasion used the example of pet passport issues and planes not being able to land, should the UK end up with a no-deal Brexit. The comments had little effect on the markets yesterday evening as it wasn't anything particularly new, but it does maybe present a warning as to how many questions still need to be answered on Brexit. More on Brexit developments and other political issues from within the bloc in the Euro report below.

Currency Pair% Change in 1 monthDifference on £200,000
GBPEUR1.88%€4,160
European Stocks drops on Italian concerns

Italian budget causing panic

The Italian Government presented their latest budget to the EU and have chosen to account for an increase of 2.4% of public spending next year, the previous Government were aiming for 0.8%. EU Finance Ministers have responded somewhat despairingly, suggesting they will review the budget over the next few days and give their answer in the near future.

However it was quite clear from the comments made by French Finance Minister Bruno Le Maire, who said our future as nations is linked, that the Italian proposal will have a bigger effect than on their own economy.

Over the next week the Euro could come under pressure, and once again we may see the EU and Italy in last ditch talks to come to some sort of agreement. If tensions weren't already running high, the Italian Deputy Prime Minister Matteo Salvini only added to the spectacle stating "If Brussels says I cannot do it, I do not care, and I will do it anyway". 

The Euro has already started to struggle against the US Dollar with the rate moving to a one month low yesterday. Currently against Sterling the only saving grace for the single currency is that UK uncertainty outweighs the fears with Italy. However, should talks start to move along then the uncertainty surrounding Italy could start to have a bigger effect on the GBP/EUR rate. 

The latest Services Purchasing Managers Index data will be released tomorrow, as well as Retail Sales for the month of September which are expected to show a slight improvement.

For more information on how future data releases could affect your currency requirement, call our trading floor on 01494 725 353 or email me here.

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