Spreadex Market Update
Reports of confidence over Greece, and strong data, boost Eurozone
Despite Greek fears inspiring a decline in the region’s composite PMI, the Eurozone’s services figures were strong, and these figures were not alone. Retail sales jumped from the dismal figures seen last month whilst the Eurozone’s unemployment rate fell faster than expected.
Yet main catalyst for this morning’s growth has been some positive dispatches in regards to Greece. News that Eurogroup chief Jeroen Dijsselbloem is to meet Alexis Tsipras with Jean-Claude Juncker tonight is potentially telling, since Dijsselbloem had originally stated yesterday that a deal this week isn’t ‘theoretically possible’. Hot on the heels of this announcement were reports suggesting a growing confidence in Brussels over the likelihood of a deal being announce tomorrow, reports that were countered by claims from the European Commission’s head spokesperson that no deal will be reached today. Regardless, it is a sign of the times that progress on such a fund-unlocking deal should cause any market upswing, given that another bailout will like just push the trickier and more unpleasant Greek issues down the road.
The FTSE spent Wednesday morning in a fairly lifeless state, even if it has marginally edged into the green. A dismal UK services PMI joined the widening losses for the index’s commodity stocks, preventing the FTSE from showing any signs of a significant rally even if some of the goodwill from the Eurozone pushed it slightly higher.
Amidst the Greek hubbub in Europe, the US markets will likely endure another difficult afternoon of data this Wednesday. The country’s trade balance has been incredibly mixed in 2015, but analysts are forecasting a slight improvement; the ISM non-manufacturing PMI, on the other hand, is expected to fall. The most important figure, however, will be the ADP non-farm employment change; whilst the correlation between the ADP and government released non-farm figures is hardly consistent, this release will still be a litmus test for the markets ahead of the increasingly Fed-relevant government figure on Friday.
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