Spreadex Market Update
Bullish sentiment sweeps through the markets as oil continues to rise
The FTSE is now near 4 and a half month highs as UK construction PMI beat expectations, adding to the swell of positivity stemming from the strengthened positions of oil and copper. Brent Crude is now trading solidly in the $56 per barrel range, and after BP limited its damage, the FTSE’s energy sector as a whole looked healthy; similarly, as copper followed oil’s example by reaching levels not seen in nearly 2 weeks, the mining sector looked just as perky. Afren, bolstered by the current oil rallied, continued its own impressive comeback, and is now trading at above last Tuesday’s pre-slump price on what looks set to be its third big day of gains in a row.
Disappointing region-wide PPI and poor Italian CPI couldn’t dampen the spirts of the Eurozone, as reassuring news out of Greece helped the markets and continued to push the DAX to new highs. After what has been seen as a savvy, if conciliatory, ‘debt swap’ plan by Varoufakis and the rest of the Syriza party, fears of a ‘Grexit’ have been calmed and investors have made this felt on the markets. As Varoufakis continues his European tour in Italy as he meets financial minister Padoan and PM Renzi, the Greek stock market has nearly recovered the losses it saw post-election, as the country’s banks were as pleased as the rest of Europe at the proposed debt plan.
Despite insistence that they will still seek a debt cut at some point, the outline announced today has been seen as Syriza providing important concessions to the Eurozone establishment in the face of the relative brick wall it has hit in its search for more sweeping debt reforms. However, the party might be in for its own coup, as rumours continued to circulate that key members of the Eurozone want to see the EU/ECB/IMF ‘troika’ disbanded. It is this institution Syriza most resent, and the removal of this undemocratically elected cabal will be a useful tool for Syriza to combat their critics in regards to any perceived backing down from their pre-election promises.
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