Spreadex Market Update
No news is bad news as markets continues to languish
The US markets couldn’t capitalise on the impressive non-farm data last Friday, as the Fed’s Dennis Lockhart maintained that weak inflation and wage growth were still issues despite the stronger than expected jobs figures. This relative dovish statement weighed on the markets by close, and given the bearish clouds over Europe, the US futures have acquired a reddish hue as the day has gone on. With only the labour market conditions index in terms of data, the US markets, like the rest of the world, will be looking to the G20 meetings for signs of stability from the increasingly fractured Eurozone region.
With the Greek parliament currently debating Alexis Tpsiras’ economic programme, there has been little but the usual statements about the tenability of Syriza’s plan coming out of the G20 meetings. Despite Varoufakis stating there is no Greek-Euro conflict, comments from Jean-Claude Juncker warning that the EU won’t accept Syriza’s full programme and the news that the UK has held in-house talks about a possible ‘Grexit’ have done nothing to calm the markets. Gatherings like the G20 normally do more to highlight the world’s problems than solve them; this extra spotlight on these issues and the conflicting comments intermittently leaking out are all contributing to the markets’ current poor performance.
Oil has managed to largely hold on to the levels it reached last week, and copper is currently retesting the $258 per pound resistance level that has prevented it from achieving a true oil-like rally. However, the behaviour of these commodities hasn’t been enough to drag the usually commodity sensitive FTSE out of its sulk as it succumbs to the market weariness that is emanating from the continent. With a tax storm brewing over HSBC and the HMRC, the FTSE may be in for more bad news as the week continues.
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