Spreadex Market Update
Latest bond sell-off adds to market misery
The Greek situation began to look even worse as the day went on with reports suggesting the IMF is increasingly reluctant to participate in a potential third bailout for Greece, due to the lack of progress the country has made in regards to implementing reforms and maintaining the institution’s austerity measures. These reports were swiftly followed by the news that Greece paid its €750 million IMF instalment with its emergency funds held in an account at the Fund itself. Greek PM Alexis Tsipras then revealed that the country only has around €600 million in cash reserves, if anyone needed more convincing that Greece is fast running out of money. Add bond weakness and a euro surge against the dollar into the mix, and the DAX was down 2% on the day with the rest of the region not far behind.
Despite better than expected industrial and manufacturing figures, leading cable to levels not seen since mid-December, and agreement from Wolfgang Schauble that Europe needs reforming, the FTSE neared DAX levels of declines as it posted over 1.5% in losses. The bond sell-off, with UK gilts embroiled in the mess, didn’t help matters; neither did easyJet’s continued plunge, with the airline nearing 10% in losses. The UK index will have the latest NIESR GDP estimate to deal with this afternoon and after some weak figures in this area of late, this release could pile on more misery to the FTSE’s dismal Tuesday.
With the situation in Europe far from rosy, the US futures couldn’t help but get involved, falling by nearly 1% ahead of the bell. This afternoon JOLTS job openings are forecast to increase; however, jobs data has been a notably tricky prospect for the US markets of late due to the complexities of the Fed/ rate hike/dollar conundrum. FOMC member John Williams, a noted dove, then speaks this afternoon and could provide a bit of extra confusion to an already negative trading atmosphere.
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