Spreadex Market Update
Quiet morning allows for post yuan devaluation recovery to continue; US retail sales this afternoon
Despite many of the FTSE’s oil and mining stocks abandoning their morning rebound in favour of more losses, the UK index has managed to hold onto its gains, even if they have cooled slightly as the day continued. It is hard to see the FTSE doing anything else but following the lead of its commodity stocks for the rest of the week, especially if China throws any more surprises into the mix.
There was a bit more news over in the Eurozone. The Greek parliament vote on the third bailout is expected to commence at midnight, meaning the markets only really have dribs and drabs to work with. Reports continue to suggest that one of Germany’s key objections to the deal is the absence of the IMF, something that could only be rectified with some kind of debt relief for Greece. The German deputy finance minister Jens Spahn himself said this morning that ‘a so-called haircut is not legal’ but that the country would be open to other forms of debt relief; we will see how that sentiment pans out when Wolfgang Schauble meets with the rest of the Eurogroup tomorrow.
There was also the curious case of Greek GDP; the flash estimate came in at 0.8%, far, far higher than the 0.5% contraction analysts were expecting, leaving everyone scratching their heads in bemusement. Regardless, the region’s news remained on the positive side of the deal/no deal divide this Thursday, allowing the DAX and CAC to maintain the growth they saw immediately at the open.
With the markets appearing to allow for other, non-China related, news to creep in today, the US indices have another busy afternoon on the cards. An improvement in retail sales and a steady unemployment claims figure is the expected data-landscape, and could portend an afternoon decline for the rate hike adverse Dow Jones. The US markets eventually managed to mitigate most of their precipitous losses by yesterday’s close, but the futures haven’t been as robust in their gains as the European markets this Thursday.
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