LONDON (Reuters) - Former Italian prime minister Matteo Renzi looks set to trigger a leadership contest at a meeting of his ruling Democratic Party (PD) today to try to head off attacks from senior party figures who accuse him of having pulled the party too far to the right.
His backers are confident that he will ultimately see off his challengers, but one consequence will be a postponement of the early elections Renzi had hoped to stage this year.
In the latest referendum setback to a European government, Swiss voters on Sunday soundly rejected plans to overhaul the corporate tax system which had been an effort to abolish ultra-low tax rates for thousands of multinational companies while encouraging them to stay in Switzerland.
Switzerland has been in the firing line of the European Union and OECD for years over the special tax status that cantons give foreign companies -- some pay virtually no tax above an effective federal tax of 7.8 percent. Opponents of the reform said the reform was so defective that it could have led to even lower tax revenue, warning the Swiss would bear the brunt through cuts to public services. The European Commission is due to react today.
Initial optimism on Friday that the IMF and Greece's eurozone lenders had narrowed some of their differences over the country's bailout package was tempered over the weekend. Greek Prime Minister Alexis Tsipras warned them that, whatever they agreed between themselves, there was no way Athens would accept further burdens on a country he described as having been "pillaged". European Commission President Jean-Claude Juncker moreover conceded that any agreement was "on shaky ground" because the IMF had not decided what role it would play.
World stocks are within a whisker of their highest since May 2015, lifted by Wall Street’s main indexes all closing at record highs on investor anticipation of U.S. President Donald Trump’s “phenomenal” plans. The fact there were no obvious disagreements over trade and currency policy in Trump’s two days of talks with Japanese Prime Minister Shinzo Abe added to the optimistic mood.
The dollar hit a two-week high against the yen on Monday. Markets’ next focus is on semi-annual testimony from Fed Chair Janet Yellen on Tuesday. European shares are expected to open higher and miners may well be in focus with metals prices strong.
The dollar index against a basket of currencies is down a shade, although the yen is down 0.4 percent at 113.68. The euro is flat at $1.0638 and sterling is up 0.3 percent at $1.2507. Japan’s GDP grew at a 0.1 percent annualised rate in Q4, helped by a weaker yen, but there was scant sign of inflation.
European equity index futures trading up 0.2-0.3 percent. The move would bring the STOXX 600 very close to its January peak when the pan-European index hit its highest level since end-December 2015.
Upcoming data/events/themes for market reports on Monday
Editing by Dominic Evans