Italy was front and centre on...........>

EURO-DOLLAR: Italy was front and centre on Tuesday.

- To recap, PM-designate Cottarelli failed to announce his cabinet on Tuesday

but will meet with President Mattarella again on Wednesday. There is talk of

elections in late Jul/early Aug, although M5S are willing to 'work with the

President,' with the threat of his impeachment now gone. M5S still seemingly

favour a partnership with the League, who still want Savona to be FinMin. The

League's leader Salvini noted that his government plan does not include an

immediate euro exit. FDI seem willing to support the M5S/League coalition if

required.

- EURUSD trades at 1.1535 last, after hitting a low of 1.1510 on Tuesday.

Support is seen into 1.1500, and a break here would open up the long term

pivotal support level at 1.1491. Resistance comes in the form of the May 28 low

at 1.1604.

- German CPI will cross on Wednesday, although focus will remain on political

developments in Italy.