Euphoria in Brazil, pain in Italy

Both USDBRL and ITA40 (FTSE MIB underlying) tumble by around 3% on Monday but similarities end at this point. Brazilian markets are in euphoria after a landslide win of pro-market candidate Jair Bolsonaro in the first round of presidential elections that will be concluded 3 weeks from now. Falling USDBRL is a reflection of appreciating Brazilian real and the pair is just above the key 3.70 support. Meanwhile in Italy stocks tumble as investors are concerned by surging bond yields – a consequence of fight between the Italian government and Brussels over the budget deficit. ITA40 has cracked a support at 20200 points and the next major support is at a distant level of 19000 points.