Spreadex Market Update
Greece hopes to supply magic list of reforms
After the tentative agreement last Friday of a 4-month bailout extension, and an effective white flag from Syriza, the Greek party will this Monday have to satisfy its creditors with a list of economic reforms. Reports this morning from Germany’s Bild suggest that it will be tax avoidance that is Syriza’s main focus, with a side plate of clamping down on illegal cigarette and petrol smuggling. This will look to raise €7.3 billion; however, it remains to be seen whether this plan will be far reaching enough to assuage the troika, which appears to be gunning for Greece after the country’s attempts at renegotiating its debt. Logic would dictate there will have to be a lot more than these tax changes if Greece wants to secure the loan it cannot really go without later today.
Regardless of the precarious nature of the truce that has appeared in the Eurozone, the markets’ reaction was explosive. The FTSE is now roughly 15 points off of all-time highs, whilst the DAX did indeed break it records alongside similarly historic figures from the Dow Jones and the S&P. The Nikkei was the latest index to receive this lucrative Greek-bump, hitting a 15 year high as the markets remain hopeful for a resolution to the issue some point this week.
Elsewhere, as the world waits for Greece’s list of reforms the FTSE will also have an eye on the UK’s CBI realised sales data; with cheaper oil and food this figure has beaten expectations of late, and forecasts are pointing to an improvement on last month’s number. And as HSBC is continually hit by new aspects of its tax evasion scandal, including the fact that chief executive Stuart Gulliver used a Swiss account to hide £5 million of his own money, the bank saw worse than expected pre-tax profits, leading to an immediate fall on the markets.
Finally, after a choppy week that saw it at one point dip to $57 per barrel, Brent Crude has continued to cling onto what increasingly seems to be its $60 per barrel support level, even if it does occasionally threaten to slip below this mark.
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