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European markets rally ahead of Italian elections' results

The German DAX 30 (+0.40%), the French CAC 40 (+1.58%), the Italian FTSE MIB (+2.33%) and the Spanish IBEX 35 (+1.83%) are moving higher on Monday ahead of Italian elections' results. Investors are also preparing for a likely dovish speech in tomorrow's Fed Bernanke's semi-annual testimony.

The British FTSE 100 gains +0.60%. UK BBA Mortgage Approvals eased from 33.6K to 32.3K in January, instead of rising to 34.2K as expected.

The preliminary release of the Italian January Trade Balance non-EU showed data going from €3.317B surplus to €-2.281B deficit. The Spanish Producer Price Index (YoY) eased from 3.3% (revised from 2.7%) to 2.6% in January.

Futures for the American S&P 500, Nasdaq 100 and Dow Jones 30 are signaling a higher opening between +0.45% and +0.60%, ahead of the US session calendar: US Chicago Fed and Dallas Fed indexes, as well as German Buba Weidmann's speech, at 15:30 GMT.

Forex Flash: EUR/USD eyes Italian election results – UBS

The market was unquestionably on a risk-averse footing over the past week as we saw heavy flows in major pairs, all expressing a negative view on their respective macro drivers. In particular, the EUR/USD suffered a fourth straight week of heavy selling, with hedge funds continuing to take off their longs.
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Forex Flash: GBP/USD in mid to high 1.40's in the coming weeks - Commerzbank

The UK sovereign rating was downgraded for the first time since the 1970's: Moody's took the iniciative on Friday, cutting the rating from AAA rating to AA1. “The reasons for the downgrade are at this stage well known: low growth, moderately high inflation and a large budget deficit”, wrote Commerzbank analyst Peter Kinsella. “To a large extent this will have been priced in by markets, which have expected a downgrade since the Chancellor's autumn statement last year. Nonetheless we can expect further sterling weakness in the short term, the only question is the extent of that weakness”, he added, expecting the GBP/USD to trade towards the mid to high 1.40's in the coming weeks.
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