Spreadex Market Update
Greek fears play havoc with markets
Both core and normal inflation figures exceeded expectations, causing some to speculate that the ECB could upgrade its outlook tomorrow. However, despite the clear effectiveness of Mario Draghi’s QE programme, the Eurozone’s focus, frustratingly for the central bank President, remains firmly on Greece. The region’s indices spent the morning shifting between losses and less extreme losses whilst the euro focused on the inflation data to surge against the dollar.
Alexis Tsipras has said that a ‘comprehensive proposal’ was sent to Greece’s creditors yesterday evening, and that he is optimistic that a deal will arrive before Greece travels any further up a certain creek without a certain rowing instrument. This has created some confusion over who has received what; some claim Greece is awaiting a creditor-approved proposal, whilst Tsipras is adamant that the decisions are now in the hands of the creditors based on Monday night’s proposal submission, whilst yet more speculation has the situation as yes, a Greek proposal was submitted, but no, it wasn’t good enough. Given that fact that the lack of agreement has now extended to the basic facts of who has what, it is hardly surprisingly how muddled the markets have been this morning.
Like the Eurozone, the FTSE’s own piece of positive data, the first growth in construction PMI since March, could dispel the negative trading atmosphere that took hold as Tuesday morning progressed. The pound, like the euro, went the other way in a valiant attempt at taking back some of its recent losses against the greenback.
The weakness of the dollar this Tuesday morning couldn’t help the US futures, which have spent much of the morning suffering under the same bearish attitudes as the FTSE and the Eurozone. With only factory orders to deal with this afternoon, special attention will be paid to the Fed’s Lael Brainard, who is set to speak in Washington on the USA’s economic outlook and monetary policy later today. Brainard is a noted dove, so it will be interesting to see any changes in her stance following more mixed data yesterday afternoon.
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