European equity markets are higher on the day as two Italian banks were rescued over the weekend.
The deal will result in Vento Banca and Banca Popolare di Vicenza being wound down, and the good assets of both banks will be sold to Italy’s largest retail bank, Intesa Sanpaolo, and the Italian government will should the burden of both banks bad assets. The bailout could cost the Italian tax payer up to €17 billion. There are still questions still hanging over the Italian banking sector, but for now investors are content with the Continent’s financial health.
Brent Crude oil and WTI bounced back today as short covering kicks in, the energy market has been under pressure for some weeks now, and seeing as the number of active rigs rose for a 23rd consecutive week, the over-supply fears will remain.
The GBP/USD opened higher last night and was creeping higher this morning but suddenly handed back its gains as money poured into the US dollar. Traders are optimistic that an agreement will be reached between the Conservatives and the Democratic Unionist Party (DUP), and there is speculation that it will be reached today. The British Bankers Association (BBA) announced that mortgage approvals for May was 40.3K vs 40.25K expected.
We are anticipating the Dow Jones to open 56 points higher at 21,450, and we are calling the S&P 500 5 points higher at 2443.
At 1.30pm, the US will reveal the durable goods report for May, and the consensus is for a 0.6% decline on the month, and that compares with a 0.7% drop in April.
Schnitzer Steel Industries will post their quarterly figures later today.
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