Italian Referendum Xtrade sentiment: No change of margins, Bearish EUR

After yesterday’s historic OPEC oil cut agreement, the markets are now shifting their focus to the NFP and the Italian referendum. The overall consensus is inclined towards the ‘no’ result for this coming Sunday. How are the Forex brokers preparing for this event? What is the Italian Referendum Xtrade sentiment?

1 December, AtoZForex – Over the past six months markets have been constantly in an uncertainty. Firstly, Brexit took place, followed by the Turkish coup, US presidential elections and concerns around the Fed rate hike. Now, another round of volatility is expected with the Italian referendum coming Sunday. To offset potential risks, AtoZForex’s readers have requested information regarding the precautionary measures of retail Forex brokers. Along with the possible market outlook post the referendum results.

Therefore, AtoZForex has reached out to Xtrade, inquiring the broker’s expectations and if Xtrade is undertaking any precautionary measures. Below are the comments provided by Kyley Picov Director of Corporate Communications at Xtrade.

Italian Referendum Xtrade sentiment: Any risk aversion actions? 

Xtrade continuously monitors market developments and as needed adjusts financial terms to ensure client equity safety. This referendum may directly impact volatility on Italian shares and more generally the Euro and European share indices. Clients are invited to contact support and their representatives for any updates.

Italy’s referendum outcome and effect on EUR

Xtrade has no official expectation of the referendum outcome, though we note the unofficial polls trending NO, despite online bookmakers substantial odds favoring YES.

Referring to EUR, we have difficulty envisioning a near-term positive result for the EUR resulting from this distracting referendum. Furthermore, Xtrade expects market opening on Monday to be steady to weakening, a prelude to a challenging 2017 for the Euro and its economies.  

Impact on ECB meeting on December 8th

Xtrade commented that the spin will be as per to the outcome:

  • YES – Victory for the EU and closer federal unity.
  • NO – It’s an Italian internal matter and as such has nothing to do with the EU

In any event, opened ECB monetary floodgates may be re-directed this way (Italian industrials) or that (Italian banks).

Xtrade’s recommendations to traders

Overall bearish on the affected financial instruments, but as with this year’s Brexit and Trump immediate over-reactions, look for a regression to the mean (correction). In addition, Xtrade’s lines of communication (phone, chat, email) are now available on mobile devices.

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