Global Stocks Slide On Italian Bank Worries; Dollar Dips As Trumpflation Takes A Back Seat

European shares dipped and U. S. equity-index futures (-0.3%) pointed to a lower open as traders questioned the stability of the Italian banking sector ahead of next weekend’s referendum as well as the longevity of the Trumpflation rally, pressuring the dollar, sending the USDJPY sliding as low as 111.355 overnight, before rebounding over 112. That was the dollar’s biggest fall against its Japanese rival since October 7 and against a basket of top world currencies it was the greenback’s worst day since November.
The euro rose to an 11-day high $1.0686 as it got a lift too from the election of Francois Fillon as the center-right candidate in next year’s French presidential election. The reformist former prime minister is now favorite to become president, with a flash opinion poll showing he would easily beat National Front leader Marine Le Pen in a run-off second round. Markets worry the far-right Le Pen, who has promised a referendum on membership of the European Union if she wins, would threaten the future of the currency bloc.
“It’s a bit of a pull back in the dollar,” said Societe Generale strategist Alvin Tan. “The fall in oil is pushing back U. S. bond yields and that is leading the consolidation in the dollar.. there is more scepticism about an (OPEC) output cut now.”

This post was published at Zero Hedge on Nov 28, 2016.