The Italian President blocked the.......>

EURO-DOLLAR: The Italian President blocked the formation of the M5S/League

government over the weekend as he vetoed their EconMin nomination, Savona, owing

to his anti-EUR stance. This will likely send Italy back to the polling booths

after PM-designate Conte stated that he cannot form a gov't. Since then 5SM have

been discussing the impeachment of Mattarella, although such a motion would

require support from the League who have remained quiet on the matter.

Mattarella is set to meet with former IMF official Carlo Cottarelli on Monday

and has noted that he will wait before deciding on the calling of new elections.

This all comes after ratings agency Moody's placed Italy's Baa2 rating on review

for downgrade on Friday citing the significant risk of a material weakening in

Italy's fiscal strength, given the fiscal plans of the new coalition government

& the risk that the structural reform effort stalls & past reforms are reversed.

- Questions also hang over the Spanish political space, with PM Rajoy set to

face a no confidence vote. EURUSD last deals at ~1.1725, at best levels as

Europe comes in for business, with resistance noted at the May 24 high (1.1750),

while support comes in at the YtD low (1.1643).