Euro recovers on the back of strong eurozone inflation figures

UniCredit CEO Jean Pierre Mustier discusses the impact of political uncertainty on Italian markets and

The euro is poised for its first weekly gain in seven weeks on Friday as worries over Italy's political crisis ease, but the Canadian dollar and the Mexican peso were hit when Washington lifted exemptions from tariffs on imported steel.

In Spain, political vacuum looks set to be averted as Pedro Sanchez was nearly certain to become Spain's new Prime Minister after his socialist party secured enough votes to topple Mariano Rajoy in a confidence vote scheduled on Friday over a corruption case.

London's FTSE 100 was up 0.5%, Frankfurt's DAX 30 gained 0.6% and the Paris CAC 40 was down half a percent.

Meanwhile, Italian utility Enel has moved to the downside after winning a highly contested multibillion-dollar battle for AES Corp.'s Brazilian utility.

The EU's statistics authority, Eurostat, said inflation in the eurozone jumped to 1.9% in May, a sharp pick-up from the 1.2% recorded in April. The Spanish IBEX 35 sank 2.2 percent.

European equity markets dropped sharply today with main indexes down more than 1.5% on average while Italian bond yields soared.

In currencies, the Canadian dollar and the Mexican peso were flat, recovering from Thursday's falls after the USA decision to impose tariffs.

A Reuters poll conducted before the release of the regional data suggested that Germany's harmonised consumer price inflation (HICP) rate would rise to 1.8 percent in May.

BONDS: Bond prices rose.

The trader has staked nearly 300,000 euros ($350,000) on a bet that will pay out at least 100 million euros if 10-year bund yields slide to minus 2.30 percent in two months. General Electioc took the worst losses among industrial firms as it sank 2 percent to $14.35, while Delta Air Lines lost 1.9 percent to $54.82.

U.S. S&P500 mini futures rose 0.5 percent, but market holidays in the world's two biggest financial centers - London and NY - could make trading slow and illiquid for the day.

Oil prices remained under pressure from expectations that Saudi Arabia and Russian Federation would pump more crude, even as United States oil output rises.

Brent crude futures edged up 0.3 per cent after dropping to $74.49 per barrel on Monday, their lowest in about three weeks.

KINDER MORGAN: Kinder Morgan climbed 2.4 percent to $16.27 after the Canadian government said it will buy an oil pipeline to the Pacific coast to ensure it gets built.

"While a 25 basis points hike is largely a done deal, the next focus is on whether the (policy board) will start to indicate the peak of policy rates as policy approaches neutral", Tai Hui, JP Morgan Asset Management chief strategist for Asia-Pacific, said. The company halted essential spending on the project and said it would cancel it altogether if the national and provincial governments could not guarantee it.

On Wednesday Japan's Nikkei 225 stock index dropped 1.5%, South Korea's Kospi dropped 1.8% and the Hang Seng in Hong Kong slipped 1.2%.

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