Spreadex Market Update
Oil posts strong gains as Greek-debt battle heats up
There is a sentiment building in certain quarters that after stabilising at $48-49 per barrel for the past two weeks, the rebound on Friday is a suggestion that oil’s bottom has finally been reached. Overall positive manufacturing PMI from the UK and Eurozone provided more (mild) cheer for the commodity, as it heads into its best afternoon of the New Year.
It took longer than one would think, but this surprise growth from oil lead to a lunch-time rebound for the FTSE as it was buoyed by its energy sector. And after its disastrous start to last week, Afren is slowly recovering some ground as it delayed its $65 million of due payments. With the UK’s manufacturing PMI growing to 53.0, the FTSE is off to a decent start to February after it saw its best month in nearly a year in January.
The overall positive picture from Eurozone manufacturing led much of the region higher; however, it appears that the marginally better-than-expected PMIs from Spain and Italy weren’t enough to impress investors in the FTSE MIB or the IBEX 35 as both begun to slip as lunchtime looms.
Whilst much of the Eurozone grew, Greek factory PMI hit a 15-month low as the run up the Syriza’s victory spooked those in Greek manufacturing. The lack of confidence in Tpsiras’ party from key sectors in the country will likely damage their already shaky proposition to renegotiate Greek debt. As Varoufakis sits down with George Osborne in the latest stage of the region-wide tour to convince a staunchly-austere Eurozone establishment to consider Syriza’s debt intentions, it was announced that Alexis Tspiras is to meet Jean Claude-Juncker on February 4th. Unconfirmed reports suggest that the EU Commission president is seeking an alternative to the Troika’s Greek mission, and whilst Juncker has dismissed the idea of completely writing off the public debt, he might be an ally for Syriza.
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