Spreadex Market Update
Greek virus plagues markets on Thursday morning
Despite Tsipras reaffirming that he is confident Greece will make the IMF repayment tomorrow, and bullish comments from Pierre Moscovici, the EU Economic and Monetary Affairs Commissioner, investors are fleeing the Eurozone due to the lack of a tangible deal on the table. Things were exacerbated by the latest sell-off in European bonds, with the German 10 year-Bund at one point hitting its highest yield since September 2014, and another strong performance from the euro-dollar. This meant that the Eurozone indices spent the morning haemorrhaging points as investors reacted violently to the disappointing outcome of yesterday’s meetings.
The FTSE wasn’t immune to the negative effects of the Greek market virus, falling to its lowest price in a month. Of course the commodities situation isn’t helping matters; copper has kept falling on this week’s news of lower Chinese demand, whilst Brent Crude is flat-to-falling ahead of the OPEC meeting tomorrow. This has seen BP, Rio Tinto, Shell and Vedanta all post widening losses as the day continued, contributing to the dismal performance of the UK index.
Currently the US futures are showing declines, but declines nowhere near those seen in Europe. Despite the bearish trading atmosphere in regards indices, the hammering the dollar is getting has helped the US futures hold back more excessive losses. It will be interesting to see how this situation manifests itself once the latest jobless claims and revised non-farm productivity data are released; another high figure in the former, which is what analysts are expecting, should extend the dollar declines and therefore, in theory, push the Dow into the green. Yet it remains to be seen if that will be enough to overcome the negative trading waves emanating from Europe.
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