Italy's new deficit target sparks relief rally in equities and euro
The main market-moving story of recent days has turned out better than expected
Sydney — Asian shares reversed early losses on Wednesday, while the euro rebounded from six-week lows on reports Italy will cut its budget deficit at a faster pace than expected, raising hope that Rome can stave off a problematic debt blow-out. Italy will reduce its budget deficit to 2% of gross domestic product (GDP) by 2020, from the earlier announced 2.4%, local newspaper Corriere Della Sera reported. The pledge boosted the euro. The single currency has been rattled by concern that a significant increase in the Italian budget will deepen the country's debt and deficit problems, and by extension those of the European Union. The euro jumped 0.3% on the news to $1.1585, snapping five straight days of losses that had pushed it to a six-week trough of $1.1506. MSCI's broadest index of Asia-Pacific shares outside Japan climbed 0.2% with Hong Kong's Hang Seng index up 0.5% and Singapore shares adding 0.9%. Japan's Nikkei pared early losses and was last a shade weaker while Australian sh...
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