Forex Flash: New lows on Italian bond yields support euro – UBS

FXstreet.com (Córdoba) - On Monday, when markets digested the new Italian government, Italian bond yields fell to new lows and the euro appreciated, notes the UBS analyst team. "However, we do not think that this initial reaction is the beginning of a new momentum. The support in the parliament for this heterogeneous government is probably too weak, to address meaningful reforms".

"Also on Monday, German CPI was surprisingly low, highlighting the need for action next Thursday, when the ECB presents its interest rate decision", UBS says. "Euro should weaken soon".