Spreadex Market Update
FTSE falls as Cameron plans to move EU referendum to 2016
After surging above 7000 in its election-inspired rally, the FTSE slipped below this landmark level once more as David Cameron plans to ‘accelerate the process’ of an in/out EU referendum and bring the date up to 2016 instead of the proposed 2017, in theory to avoid the French and German elections. George Osborne has confirmed that the issue will be on the table at the ECOFIN meeting today, if it can break through the Greek stranglehold on the region’s itinerary. With analysts forecasting falls in both manufacturing and industrial production for the UK, the FTSE may struggle to recapture its initial post-election performance in this current trading atmosphere.
Orange airline easyJet saw a £7 million return to profit this morning in its half year results to the end of March, a big improvement on the £53 million in losses seen last year as the continued cheapness of oil boosted the company’s figures. However, with the easyJet warning that current currency movements are likely to work against the airline’s favour, that air traffic strikes would harm April’s numbers and that a ‘Brexit’ would cause issues for Britain, easyJet’s shares took a pretty severe tumble this morning, sinking by nearly 8% after the bell.
The news of an earlier-than-expected UK/EU referendum has exacerbated an already negative situation in the Eurozone after another Eurogroup meeting yielded little in the way of tangible progress. Despite Greece organising to pay its €750 payment to the IMF early, Yanis Varoufakis, whose negotiation role has been reduced but not yet removed, warned that Greece could run out of funds in the next two weeks. Now, whilst Greece has used threats about its own ‘terribly urgent’ (to quote Varoufakis) financial situation in the past to relatively little effect, the truth of the matter is sooner rather than later comments like this will cease to be a threat and start to be reality. The Eurozone indices know this, and the volatility-inclined DAX is leading the red charge as declines are felt across the region.
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