Spreadex Market Update
Markets can’t make up their mind as indices rise and fall, and then rise once more
As always, the DAX led the volatile charge, fluctuating between losses and gains seemingly of its own volition. The movements in the bond market, now in the green this Thursday after haemorrhaging points in the last few days, seem to have cast a cloud over the Eurozone after falling German Bunds were pointed to as the catalyst for this week’s declines seen across the bond board.
Of course, the situation in Greece isn’t helping, with the latest kerfuffle surrounding Varoufakis this morning providing a snapshot of one of the reasons why negotiations haven’t gone to plan. Varoufakis was quoted stating he thinks the ECB should delay Greece’s debt repayments to the central bank far beyond the summer date scheduled, a comment that the finance minister later claiming was viciously misinterpreted, stating he was actually proposing a bond swap. This little incident captures the overall displeasure Varoufakis has caused amongst both Greece’s creditors and members of its own government alike; bold statements like this, even if, or perhaps because, they are often misinterpreted, hasn’t helped the negotiation process and ends up irritating the wrong people more than anything else.
With the FTSE looking sluggish, the situation for sterling continued to improve as the pound briefly touched a 6 month high against the dollar. Robust gains for TalkTalk and Zoopla couldn’t outweigh the drag Vedanta Resources caused on the mining sector this morning after it posted $1.8 million in net losses, and left the FTSE flat as the day continued.
Investors are now looking at the US open to bring with it some kind of sustained positivity. At the moment the US futures are tentatively in the green, no doubt boosted by the latest losses seen by the dollar against both the euro and the pound. The US markets will have to whether this afternoon’s PPI data, as well as the latest unemployment claims. How the Dow Jones will react to these figures remains to be seen; investors have struggled to display a coherent attitude to both good and bad data of late due to the ongoing debate over a potential interest rate hike.
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