Barclays posts profits amidst FX-scandal, Eurozone break-up chances highest for 2 years

Monday was a stellar day for the Eurozone indices, with manufacturing, inflation and unemployment data all impressing in what is likely to be a landmark month for the region.

The latest positive figures for the Eurozone came in the form of big, big gains for German retail sales, alongside hopeful signs in regards Spanish unemployment. However, whilst the DAX keeps hitting new highs with the prospect of more growth on the horizon once ECB QE finally arrives, there are still lingering doubts surrounding the Union. A Sentix poll places the eventuality of a Eurozone break-up at the highest chance since for two years, whilst there are fresh calls of ‘Grexit’ from certain sectors in Syriza. It is for this reason that the emphatic gains in the Eurozone have turned rather flat as Tuesday began.

After yesterday morning suggested a strong start to March for the FTSE, the UK index stumbled as the day went on. This led to a flat open this morning, as investors were slightly less optimistic about the FTSE’s daily performance. This could all change later this morning with the announce of the UK’s construction PMI; after a jump in manufacturing, another positive piece of data could begin to immunise the FTSE against the downward swings that keep wiping out any intraday highs it makes.

Barclays’ pre-tax profits rose 12%, superficially a vast improvement on RBS and Lloyds’ figures last week. However, this headline grabbing figure can’t conceal the fact that the bank has had to put aside £750 million for any potential FX-rigging fines, taking its overall stash to £1.2 billion. It seems investors were far more interested in that FX-figure than the profit gains, with Barclays slipping after the bell. There could be more news on this front later today, when the Treasury Committee grill Mark Carney over the FX-scandal. Whilst the BoE governor is unlikely to confirm any fine-figures, the severity of the issue may be clearer come midday.

After another significant day of losses, Brent Crude briefly dipped below $60 per barrel before opening marginally above this level come Tuesday morning. The commodity has spent the past month dancing around this mark, and its resilience to falling too far below $58 per barrel suggests some short term stability. The flip-side of this is that Brent Crude has never looked like it is ready to break through the $62 per barrel resistance level is has been sporadically grazing for the past few weeks. Whilst worries over a new plunge may be (tentatively) shelved, investors may have to get used to $60 per barrel as the new norm.