Deutsche Bank - "In general, everything that has happened will tend to play USD positive on a multi-month basis, to the extent that individual negative currency fundamentals related to the JPY, GBP and CAD have not changed, and now the EUR has largely excluded itself as a possible alternative to the USD as a medium-term long versus these currencies. Equally, particularly now that the USD's natural anti-pole has become less attractive, there is some sense that USD strength is continuing to broaden.
(...) We expect that the market will be able to see beyond this Italian election in a way which is different to its struggles after last year’s first Greek election. Risk appetite will likely become choppier and dependent on how much Italian bond yields back-up, but we believe US equities can still go higher in a way in which they could not when Greek uncertainty was most prevalent. Without additional inflammatory statements from politicians, Italy’s debt sustainability reopens the debate about the willingness of an electorate to make painful decisions, without markets enforcing pain. Should markets become less obliging as seems likely, such increased asset market volatility will further broaden USD strength..."