Spreadex Market Update
Greece faces ECB showdown, oil eyed warily by investors
However, as the DAX reached new highs after investors were seemingly calmed by Greece’s less extreme debt plan, the markets are more likely to focus on any new developments in this ongoing saga. As Varoufakis visits Draghi and the ECB and Tspiras meets Jean-Claude Juncker at the EU Commission, the Eurozone indices are already feeling jitters ahead of any news leaks from these meetings.
This is undoubtedly the biggest test of this Greek-Euro tour, and Draghi and Juncker are key figures in, and important potential allies for, Syriza’s cause. However, Varoufakis is caught between emphasizing debt payments linked to growth to the Eurozone establishment whilst trying to calm the sentiment from Syriza supporters that the party is already backing away from its key pre-election promise. The Greek finance minister has reaffirmed Greece will repay its debt to the central bank, but with rumours that the ECB is less than thrilled about the debt-swap plan, Syriza may struggle to make any real progress.
Brent closed just shy of $57 per barrel last night, and managed to cross that boundary at open today, at one point reaching $58. After its stability for the last fortnight being followed by this impressive rally, investors are warily watching the oil to see whether it has truly reached, and escaped, its bottom. A key milestone will be today’s US crude oil inventories, a piece of data the commodity has managed to cope with in recent weeks, despite the extraordinarily high figures coming out of America.
As copper followed oil’s example to nearly its best price in two weeks, the FTSE continued to be a big benefactor of this February-commodity-rally last night. However, despite receiving further good news as communications-giant Sky exceeding analyst expectations to post impressive gains, the FTSE opened relatively flat as it waited for UK services PMI later this morning. With forecasts pointing to slight growth, the FTSE could be in for another good day as long as this oil-rally holds out.
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