Monday was a bit of an indecisive day for risk assets, although markets were generally nervous following the release of some weak economic indicators, overnight, out of Asia, and ahead of some key events this week on the macroeconomic calendar.

The latter include monetary policy meetings from the Bank of England and European Central Bank, on Thursday, and the latest monthly employment report Stateside, on Friday. Hence, some of the major currency pairs, such as the euro/dollar, opted to maintain a holding pattern above technical support at 1.30.

Of greatest concern however, perhaps, is the selling pressure seen in Italian sovereign bonds on the back of a rather negative news-flow, which for some points to the risk of political gridlock until summer followed by new elections.

That would be the result of the country´s major political parties not being willing to talk to each other.

Critically perhaps, and acting as backdrop, all of the above came on the back of weak economic statistics out overnight in China. The official service sector purchasing manager's index for the month of February slid to a reading of 54.5 points, from 56.2 in the month before. As well, authorities in Beijing announced new - and more aggressive than expected - measures to cool property prices.

Lastly, investors are still waiting on European finance ministers decision as concerns whether to grant Cyprus a bail-out or not.

AB

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