Spreadex Market Update
Greek deal hopes raised then dashed with now-rejected extension offer
This progress came in the form of news that Greece’s creditors were ready to offer a 5 month deal extension worth €15.8 billion to the indebted country, with rumours that pension reforms were agreed upon and only ‘minimal’ differences on VAT and the others outstanding issues left to fix. Yet just as hopes of a deal appeared on the horizon, Athens rejected the extension deal, calling its creditors’ behaviour ‘unacceptable’. The initial news lifted the DAX, CAC and co. into the green, but that Greek dismal began to cool the enthusiasm of investors as the afternoon went on.
The extension rejection is understandable, if frustrating. The kind of extension being offered would mean we return to this seemingly Sisyphean task at the end of the year; it is a deal that would effectively please no-one but would get the endless meetings to stop in the short-term. Tellingly Saturday’s Eurogroup meeting has now brought forwards 3 hours to 2pm Brussels time; it looks like as much time as possible is needed for the region’s finance ministers to try and squeeze out whatever malformed deal they can.
For once the FTSE struck out on its own this afternoon, only paying mild attention to the truly soul-sucking situation in Brussels. Not to say this meant the FTSE was in the green; the UK index remained in the red with investors seemingly unwilling to match the jittery hopes found in the Eurozone.
Despite a stronger than expected UoM consumer sentiment figure, the best since January, the Dow Jones ignored the hawk-boosting element of this news to overcome its pre-market flatness and edge closer to 18000 as the dollar remained flat against the euro and pound.
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