Welcome to your morning markets update, delivered every weekday before the European open. Good morning. What next for Italy's government, Boris Johnson visits Angela Merkel and the Fed minutes kick off a cavalcade of central bank talk. Here's what's moving markets. Conte DepartsItalian government bonds rallied after Prime Minister Giuseppe Conte resigned from the government, as expected, but pushed back against the notion of fresh elections, raising the chance that a new coalition will be sought and at least a degree of the turmoil brought by new polls will be avoided. But Italian stocks didn't take the news so well, falling yet again as analysts branded the situation a "total mess." Whatever the outcome, more uncertainty is on the menu and given investors have already fallen out of love with European stocks, that's unlikely to help the FTSE MIB. Boris in EuropeU.K. Prime Minister Boris Johnson is set to visit Germany's Angela Merkel on Wednesday and France's Emmanuel Macron a day later as he attempts to garner at least a modicum of support for his plans to renegotiate the current Brexit deal. Those overtures fell on deaf ears with the European Union, which is sticking to its view on the controversial backstop being an essential component of the exit agreement and rebuffing Johnson's demands to reopen the talks. Beyond that, the U.K. may also wait until after Brexit to name a successor to Mark Carney heading the Bank of England. Central BankfestThe first volley of central banking action arrives Wednesday in the form of minutes from the Federal Reserve's most recent policy meeting, followed Thursday by minutes from the European Central Bank and by the Jackson Hole symposium. But traders are starting to prepare for the possibility that even if Fed Chairman Jerome Powell does signal further easing at his speech on Friday, the overall tone may disappoint. Traders also continue to find ways to play the inverted yield curve, though a Japanese mega fund thinks markets are now so synchronized that managers risk losing on every front. Lira SlipsIt has flown under the radar somewhat this week but Turkey's lira has taken a hit as the strong dollar catches up with a favored yield play among currency investors. More substantially, traders also appear to be fretting that the central bank – under even more intense pressure than the Fed to cut rates – is taking an easier monetary policy path than anticipated, raising the risk things could overheat again. Along with Argentina, which is pledging to get its currency under control following the spectacular rout in its assets last week, Turkey has moved to the center of emerging-market concerns once again. Coming Up...The summer doldrums have well and truly set in for financial markets. Asian stock indexes were mixed on low volumes, with investors in a bit of a holding pattern before the news flow from central banks over the next couple of days. U.S. and European stock-index futures ticked slightly higher after a down day yesterday, when President Donald Trump showed no urgency to resolve trade friction with China and renewed his call for a "big" Federal Reserve rate cut. U.S. crude inventories will arrive later in the day, during a week when the oil price has been fairly steadily holding gains made over the weekend. What We've Been ReadingThis is what's caught our eye over the past 24 hours. And finally, here's what Cormac Mullen's interested in this morningIt seems that greed is handily winning the battle over fear in Italy. Despite Prime Minister Giuseppe Conte handing in his resignation Tuesday night, Italian bonds rallied to send yields to the lowest since 2016. Investors are hoping a new coalition can be patched together that would avoid an election in the near term and a possible renewed confrontation with Brussels over the nation's budget deficit.The market reaction is a clear sign of how important the global hunt for yield has become for investors who are on the face of things ignoring credit risk in Europe's most indebted nation. The yield on Italian bonds has fallen well below that on equivalent Treasuries -- often seen as "risk-free" securities. In the backs of their minds, investors no doubt are thinking about the European Central Bank's pledge of further monetary stimulus and potential re-start of quantitative easing. This could act as a backstop against any blow-up in yields should the political crisis escalate. The global bond rally rolls on.  Cormac Mullen is a Cross-Asset reporter and editor for Bloomberg News in Tokyo. Like Bloomberg's Five Things? Subscribe for unlimited access to trusted, data-based journalism in 120 countries around the world and gain expert analysis from exclusive daily newsletters, The Bloomberg Open and The Bloomberg Close. Before it's here, it's on the Bloomberg Terminal. Find out more about how the Terminal delivers information and analysis that financial professionals can't find anywhere else. Learn more. | 
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