Italy’s Renzi says he will resign after being roundly defeated in yesterday’s referendum, and the oil market is in backwardation.
No referendum panic

As polls predicted, Italian voters rejected Prime Minister Matteo Renzi’s referendum on constitutional reform yesterday. And true to his word, Renzi announced that he would present his resignation to the president this morning. While initial market reaction was risk-off, with the euro and Italian assets hit, markets recovered their composure quite quickly. By 4:55 a.m. ET, the FTSE MIB Index was unchanged and the euro was trading at $1.0639. Italy’s 10-year bond yield was 2.0167 percent, up 11 basis points, but certainly not showing signs of investor panic. Also in Europe, the re-run of Austria’s presidential election yesterday saw the far-right candidate defeated by pro-European candidate Van der Bellen.
Brexit in dock

The U.K. Supreme Court will today hear the government’s case against holding a vote in parliament before triggering Britain’s exit from the European Union. The 11-judge court, which was only established seven years ago, is not expected to rule on the case before January. Meanwhile, rather than a hard or soft Brexit, government ministers now seem to be split on whether the U.K. should opt for a ‘gray Brexit.’ In eco-news, U.K. services PMI accelerated at the fastest pace in 10 months in November, rising to 55.2.