Spreadex Market Update
Markets continue to surge with Greek government vote, Eurogroup reaction to come
With the Greek government proposal vote still to come, and comments from Dijsselbloem withheld until technical analysis of the plan is completed (likely to be this evening), there was little to disrupt the 3 digit growth of the DAX and the CAC. Some members of Syriza are likely to vote ‘no’ to Thursday’s austere proposal but Tsipras importantly has the backing of his main opposition New Democracy; on the creditor side, meanwhile, politicians from Latvia and Slovakia both expressed concern about passing any deal in their own governments, whilst the Greek PM’s aggressor from Wednesday’s European Parliament meeting, Guy Verhofstadt, claimed that this new proposal can ‘lead to a deal this weekend’.
Yet the key absence remains Germany, which has so far failed to provide any firm comment on the latest submission and continues to be a potentially major obstacle to overcome if a deal is indeed to arise this weekend. And a deal really needs to be found soon. That may sound like an understatement, or a blindingly obvious comment, but with Moody’s suggesting that the Greek banks could be deposit-less by Sunday, the current urgency is perhaps not urgent enough.
Beyond the Eurozone there was little for investors to play with; the FTSE slightly increased its gains as the day went on, despite a mild regression from copper. The mini-slide by the metal failed to affect the mining stocks, however, and with Brent Crude stable, if a way off its recent highs, the FTSE’s sometimes overwhelming commodity sector shied away from the spotlight as the week came to a close.
The US markets saw a similarly robust open this afternoon, with the Dow Jones on track to recover most of its Chinese-volatility, Grecian-woes and NYSE-shutdown inspired losses of the first full week of July. The greenback is still taking a hammering from the euro and the pound, but this could change dependant on the comments of Janet Yellen later this evening; the Fed appeared dovish in its latest meeting minutes, so any change in tone from the central bank’s chair could see the dollar bite back going into the weekend.
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