Spreadex Market Update
No news is bad news as G7 meetings yield little in the way of Greek progress
As has been the case for the past few weeks, on this data-light start to the week Greece has dominated discussions, but this time without even a sniff of bullishness from the Greeks themselves. In display of creditor muscle France’s finance minister Michel Sapin claimed this morning that a Grexit would be ‘no drama’; with this coming on top of French calls for a June 14th deadline, it appears that some of the region’s big boys are getting restless at the lack of progress. And this frustration isn’t limited to the Eurozone itself; reports suggest that relations between Germany and the USA remain frosty as the latter urged the former for a quick solution to the Greek situation.
News that Greece is redrafting its own proposals failed to spark even the slightly bit of hope in the markets, with the DAX and the CAC posting emblematic losses throughout the morning. Much of the negotiations appear to exist in their own separate spheres; Greece is negotiating with itself whilst the creditors argue among themselves, with each side showing an unwillingness to engage with the other’s demands. The fact that Varoufakis came out of his meeting with Schauble saying ‘we did not negotiate’ captures this perfectly. Add in a fairly resilient euro-dollar, and it is no surprise that the Eurozone is suffering widespread losses this morning.
With the Greek smog letting little light through the FTSE failed to break Monday’s loss-filled trend as it continued to circle near 10 week lows. If the euro-dollar provided an extra drag on the Eurozone, then the FTSE’s own unwelcome bonus was the latest declines in copper and Brent Crude, a situation that saw BP hit its own 2 month lows whilst Rio Tinto and Vedanta saw widening losses as well.
Like the rest of the Western world the US has very little in the way of real data this Monday; though this could be a good thing given the conniptions the US markets go into whenever new figures are released. With the dollar having somewhat of mixed day against the pound and the euro, the US futures are rather flat. Granted, this flatness still leaves the Dow Jones at a one month low with only the labour market conditions index to come this afternoon.
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