Greek-inspired euro collapse as 2015 begins in earnest

The euro was the focus this Monday morning as the markets returned to their normal schedules following the festive break.

Reports out of Germany that Andrea Merkel is willing to see Greece leave the Eurozone amidst panic over the nation’s potentially volatility-inducing election at the end of January caused the euro to hit 9 year lows against the dollar. The Eurozone has been threatened by the chance of an election victory for left-wing Greek party Syriza, who would set the proverbial cat among the Eurozone pigeons with their wish to severely renegotiate Greek debt.

However things aren’t completely negative for the Eurozone. The Greek-inspired instability is almost going to guarantee the implementation Draghi’s QE wishes; and Greece is a major burden on the Eurozone, and Merkel et al. may welcome the exit of its biggest example of economic failure.

The messy Eurozone situation came on a morning where David Cameron stated his wish to bring forward a UK EU referendum if the Conservatives were to win the General Election in May. This comment will not be good news for British companies, as it was revealed in a quarterly poll of chief finance officers that the outcome of the election, alongside a potential UK EU exit, are among the biggest fears for UK businesses.

This joined warnings from John Lewis boss Andy Street that the UK retail sector’s new focus on ‘Black Friday’ may damage companies in the long term as it causes margins to widen. Unsurprisingly, this news, combined with brand new lows for oil, caused the FTSE to open at a loss this morning; things were compounded by a worse-than-expected UK construction PMI which came in at its lowest since July 2013.

A consistently disappointing weak of data as 2014 transitioned into 2015 meant that the Dow Jones once again failed to recapture the magic 18000 level it reached in the Santa rally before Christmas. There will be little home-grown news to change the fortunes of the US markets this afternoon, and based on the performance of the rest of the world, the US may be in for a tough day of trading.

Following the USA’s poor start to 2015, the Nikkei had little hope of beginning its 2015 in style as it opened for the New Year this Monday. The Japanese index closed marginally lower as lingering bearish sentiment from the US combined with brand new lows for oil to create an environment that was less than favourable for the markets.

Finally, as mentioned oil endured brand new 5 year lows, as Brent Crude at one point hit $55.25 per barrel. The commodity has continued to shed points in the New Year, prompted by a cavalcade of bad manufacturing figures across the globe last week. The black stuff is still looking abandoned and lost as 2015’s trading begins in earnest, and continues to be a stain on the worldwide markets.