Spreadex Market Update
G20 and HSCB take centre stage
Stagnant growth, volatile currencies, a Greek-debt-saga that remains unsolved, an oil price that is still too cheap regardless of its recent gains and global hotspots that continue to regularly flare up in violence all provide a backdrop for this set of G20 meetings. With Obama set to meet with Angela Merkel over the Greece-Eurozone deadlock, and little else to occupy them on this Monday morning, the markets will be carefully eyeing these discussions for signs of more than just political posturing.
Alan Greenspan, former head of the US Federal Reserve, has waded into the Greek-debt-debate, claiming that the country ‘will have to quit the Eurozone’ if Syriza want to pursue their anti-bailout agenda. This as Alexis Tspiras solidified his anti-austerity credentials last night by reaffirming his rejection of Greece’s old bailout deal. Ahead of the hastily arranged Eurozone finance meeting on Wednesday, there appears to be no change in the battle lines that became entrenched last week, and the markets are reflecting the ever-increasing potential for a volatile end to this issue.
After the FTSE limped to a close last week, it couldn’t shake the bearish trend that crept in on Friday. Things don’t look likely to change in these early hours of trading with the day providing little in the way of economic news to cling on to. The developing scandal in regards to the HSBC’s Swiss banking arm and its client tax evasion dealings is sure to drag down the index as more details are leaked, and alongside the G20 looks set to provide much of today’s focus.
If anything can provide a bullish spark in the markets today, it will be the continued resurgence of oil; however, after closing last week at an impressive $58.50 per barrel, Brent Crude has slip back towards $57, capturing the prevalent mood of the morning. Copper flattened out after a rebound at the start of last week, hovering between $256 and $258 per pound with attempts to sustain a rally beyond this boundary failing. And gold is having the worst time of all, as the non-farm inspired dollar run on Friday reduced the metal to $1240 per ounce, just as it looked like the commodity had consolidated at around $1265.
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