• European fixed-income markets started the week with a safe-haven movement as Italy's Lega and M5S agreed on Giuseppe Conte (a law professor from Florence University) as their pick for prime minister. While yields on German Bunds declined, 10-year sovereign spreads jumped by 22bp in Italy (reaching levels not seen since the first half of 2017) and by 19bp in Portugal and 12bp in Spain (levels not seen since early Jan.-2018).
• U.S. stock markets surged on the back of Treasury Secretary Mnuchin's comments that the U.S. "was putting the trade war on hold" amid progress in talks with China. European stocks were mixed and the Italian MIB index was down by -1.5 percent.
• This week, the focus will be on whether Italy's President Sergio Mattarella decides to formalize Conte's nomination. On the economic front, the focus will be on the release of the minutes of the Fed (Wednesday) and the ECB's (Thursday) last monetary policy meetings as well as on flash euro area economic sentiment indicators for May.