Political uncertainties in Europe are back on centre stage. In Spain, the President of the Catalan regional government, Carles Puigdemont, has not really clarified if his statement from 10th of October was or not a declaration of the independence. This morning, he has maintained his call to dialog with Mariano Rajoy. At this stage, Catalonia and Spain, have entered in an unchartered territory.
In Italy, the rise of populist politics should still be front and centre for investors. Italian economy is not generating sustained growth and it still has the issue of bad loans. The economy is set to grow below 1 percent this year and Italian voters are due to elect a new government at the start of next year. However, growth has returned to the euro bloc, unemployment has fallen and business activity has expanded, even Greece is growing.
If the Committee maintains intact its long term (18-24 mths) EUR Bullish Sentiment (Buying EUR on dips) with objectives of 1.2260, 1.2880 and 1.3620, it wishes to recommend investing short EUR until end of January 2018 (3 mths) fuelled mainly by the political elements mentioned above, US potential fiscal tax stimulus and higher US interest rates.