Political issues continue to cloud......>

EURO-DOLLAR: Political issues continue to cloud the outlook for the Euro.

Italian elections (as soon as this year) are looking even more likely. Former

IMF-er Cottarelli's appointment as Italian PM-designate by the President needs

to survive a confidence vote, which will be tough going as M5S/League coalition

holds a majority if they vote together. If Cottarelli does not pass the

confidence motion then an election could come "after August." Cottarelli is

expected to name his cabinet ministers within the next 24-hours. Spain is also

presenting its own political issues with PM Rajoy set to face a confidence

motion on Friday.

- EURUSD last 1.1630, after printing YtD lows of 1.1608 in EU/NY hours and lows

of 1.0614 overnight. Option linked support is noted into 1.1600 Bulls still need

a close above the May 24 high (1.1750) to ease bearish pressure.

- Tuesday brings a slew of ECB speakers including Mersch, Lautenschlaeger,

Villeroy, Coeure, Visco & Nowotny. There is some EUR 2.2bln worth of 1.1650

option expiries set to roll of at the 10AM NY cut, followed by EUR 1.02bln at

1.1700.