Spreadex Market Update
Easter bounce for European markets as they process last week’s non-farm, Iran deal
Some big news came over the break, with a dismal US non-farm employment change figure causing the Fed’s Lockhart to exclaim he now prefers a July or September hike rather than the long-proposed June lift-off, as jobs growth continues to fall behind the central bank’s desired speed. This rate-hike delay, one that should prevent the dollar from soaring too quickly, seems to have pleased European investors, with the weekend news that a tentative deal has been reached with Iran caused a welcoming trading environment after the bell.
The FTSE benefited not only from a late reaction to the US news, but from an upbeat CBI report that suggests that UK growth likely sped up in the first quarter of 2015. However, the CBI also warned that a strong pound, with sterling still up around 15% in two years despite its recent wobbles against the dollar, is hurting British exports, especially against the much-weakened euro. Yet investors focused firmly on the former rather than the latter, pushing the UK index to strong gains after its 4-day weekend.
It looked like spring had sprung in the Eurozone, with the region awash with green as it the processed long weekend’s key information. The Eurozone indices could receive another boost later this morning if the region’s services PMI matches the impressive manufacturing data seen last week. However, there is the potential for a nasty crescendo to the Greek-debt issue this week, with a IMF payment that may-or-may not be made, and a Tsipras/Putin meeting this Tuesday that has been seen by many as an aggressive political act from the Greek premier. The noose is set to tighten ever further around Greece this week, with the country claiming that it will run out of funds on April 9th, meaning the game of fiscal chicken that has been played between Greece and its creditors for much of the first quarter looks set to go down to the wire.
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