Markets Recover as Italy's Budget Deficit Concerns Loosen
Global stock markets are recovering slightly, as investors welcome reports that the Italian government will seek to reduce the deficit over the next few years. Italian newspapers reported that the government will reduce its budget deficit targets for 2020 and 2021 to 2.2% and 2% respectively and stick with its plan for 2.4% for 2019. The government originally stated it would run a deficit of 2.4% for three years, which would have breached European Union fiscal rules.
Investors are also focused on the Tory annual conference where UK Prime Minister Theresa May is due to speak. It was reported, earlier, that Theresa May is preparing a compromise on the border issue, in an attempt to get talks moving again. The British pound is very sensitive to any Brexit developments, so plenty of volatility during today’s speech could be seen.
Markets also await the US private sector employment numbers ahead of Friday’s government nonfarm payrolls report. The ADP private-sector payrolls numbers are expected to increase to 187.000 in September from 163.000 the month before.