1. Italy: It's all eyes on the Italian referendum this morning. The polls close at 09:00 AEDT, with exit polls announced shortly after and a result expected to be known by the European equity and fixed income open. S&P futures open at 10:00 AEST, but FTSE futures could be worth watching as they open at midday. We shouldn't overlook the overseas voters, where (according to La Repubblica publication) 1.6 million Italians have voted, which is more than double the number who voted for the prior referendum in April. Local press have suggested they should vote 'yes', so that could be a real influence.

2. Currencies: The polls as we know have given the prospects of a vote passing as a 'no' for some time and thus Matteo Renzi will step down and we will see further concerns around Italian politics and a deeper worry around the banking sector. I am specifically interested in EUR/USD this week, as the pair looks supported here and may well move back to the October lows of $1.0851 in the short-term. Of course it's all eyes on the ECB this Thursdays, where the market is fully expecting an extension of its QE program to be announced and much is now in the price. The Italy MIB 40 is also moving to the top of the recent trading range it's found itself in since July of 17,500 to 16,000, and as the various other political events have unfolded this year we just can't be surprised if we a 'yes' vote that would cause the MIB and EUR to rally.

3. Jobs: US data gets less attention this week, although we will see tonight's (02:00 AEDT) services ISM attracting some focus. The US non-farm payrolls on Friday showed us that the world has filled its boots on a USD buying binge of late and when you see 100% priced in for a hike in December and 64% chance of two hikes in 2017 and with the USD (trade-weighted) at a 14-year high, the data now needs to beat expectations by a reasonable margin. As it was, 178,000 jobs added was in-line with expectations, while hourly earnings at -0.1% in November were below par and thus we saw good buying in US treasuries (the US 10-year fell six basis points to 2.38%) and some USD headwinds. It seems as though we have reached an inflection point in the Trump inspired reflation trade and a period of choppy price action could be in store for US treasuries, the USD and derivatives of these markets, such as gold.

4. Greenback: The USD index will be key this week, with price delicately poised to break below 10,066 (the November triple bottom), where a break could have ramifications on a number of other markets. For the first time in a while I am actually interested in looking at being long gold as a short-term trade. Not because the world is about to collapse, but for more of a short-term repositioning from portfolios.

5. Equities: In the equity space, US indices have not really provided Asia with any conviction on Friday, although the ASX 200 should open around 5460 (+16 points), which is just a tad lower than the 21 points SPI futures closed up on Friday's overnight session. Japan, on the other hand, should open around 0.4% lower, with USD/JPY also looking like it could be vulnerable this week and I would not rule out a move into ¥111.36.

Looking at the various ADR's, we can see BHP set to open 1.8% higher, with CBA eyeing an open 0.2% lower. Commodities haven't really given us too much to work with either, with spot iron ore 0.7% and futures -0.9%. US crude has added a further 2%, with price closing up 12.2% on the week and this looks set to support BHP and the oil space, although the S&P energy sector closed up 0.1%, by way of a guide.

6. Aussie dollar: AUD/USD should also get a good working out this week, although the technical set-up is not really giving us any real clarity around future trends and looks very comfortable at current levels. The hedge fund community is still holding a small net long bias on the pair and many feel if they are going to play AUD from the short side its likely against the CAD, which is being support by the moves in crude. Interestingly, we have to go back to November 2014 to find a period where the interest rate markets were perfectly neutral on changes to monetary policy over the coming 12 months, but that is where we are now. We are going to need to see a trend emerge in the data flow to force the RBA to lower the cash rate from here and all we have heard of late from officials could be described as "cautiously optimistic".  After last week's Q3 CAPEX data and residential construction numbers, we watch for today's Q3 inventories and operating profits at 11:30 AEDT which feed into Wednesdays Q3 GDP calculation. Net exports as a percentage of GDP are released tomorrow and are not expected to contribute anything to the growth print.

There is a sizeable divergence in views from the analyst community and while the consensus is for +0.2% QoQ, we can see a range of -0.3% to +0.7%. Quite a spread and thus the market could be quite volatile on this data release.

7. Today's diary: 

• Local data: GDP partials: third quarter company profits, inventories; AiG performance of services November; MI inflation November; ANZ job ads November
• Overseas data: China Caixin services PMI November; Japan services PMI November; Euro zone retail sales October; US non manufacturing ISM, Markit services PMI

8. Market highlights: 

• SPI futures up 21 points or 0.4% to 5465 on Saturday morning
• AUD +0.5% to 74.51 US cents on Saturday morning
• On Wall St, Dow -0.1%, S&P 500 flat, Nasdaq flat
• In New York, BHP +0.6%, Rio +1.8%, Atlassian -3.4%
• In Europe, Stoxx 50 -0.5%, FTSE -0.3%, CAC -0.7%, DAX -0.2%
• Spot gold +0.5% to $US1177.00 an ounce on Friday
• Brent crude +0.9% to $US54.42 a barrel on Friday
• Iron ore down 57 US cents to $US77.79 a tonne on Friday
• LME aluminium -0.5% to $US1714 a tonne on Friday
• LME copper -0.5% to $US5760 a tonne on Friday
• 10-year bond yield: US 2.38%, Germany 0.28%, Australia 2.86%

  This column was produced in commercial partnership
   between Fairfax Media and IG.