- Get ready for more turbulence in the pound as the risk of a chaotic Brexit increase. A measure of expected swings over the next three months surged to near the highest this year and the pound continued to fall after it took a beating on Wednesday’s blockbuster Brexit news.
- Watch for the currency to react to political headlines as lawmakers trying to block no-deal spar with Prime Minister Boris Johnson over his plan to suspend Parliament. Things feel a bit more harmonious in Italy, where bonds surged and equities outperformed as the country’s president tapped Giuseppe Conte to form a new government, excluding right-wing League leader Matteo Salvini from power for now.
- That might sound familiar: for the last 18 months, Conte has led an unstable coalition that collapsed in chaos earlier in August. Now he’s got until next week to form a coalition with support from rival parties the Five Star Movement and the Democratic Party in order to avert the possibility of fresh elections which could put Salvini in power.