Spreadex Market Update
Greece continues to inspire red-dread into markets
There has been little in the way of actual news surrounding Greece, merely the usual string ominous warnings and obstinate comments from both sides. However this was more than enough for investors to fully jump on board with the negative sentiment that has been present for all but 2 or 3 days in the last fortnight. The ‘red lines’ remain the same: pensions, VAT and primary budget surpluses. Each side appears to have internally settled on the figures for this trifecta of issues, and is now refusing to budge, leading to the current impasse. Blame has been thrown on both sides, as has been the trend for the past few weeks, so it will be interesting to see how explicit Mario Draghi is with the finger-pointing later this afternoon.
The FTSE’s losses have only widened as Monday went on, with the ever-present Greek smog exacerbated by the sustained declines for copper and Brent Crude dragging with it the index’s commodity stocks. With no significant UK news this afternoon, the FTSE may have to ride out yet another Greek-led rollercoaster until its inflation figures on Tuesday morning.
Whilst Europe focuses on Greece, that issue should move to the periphery for the US markets this week. Wednesday will bring with it the latest projections from the Federal Reserve, with Janet Yellen and co. in the spotlight even more than usual. Of course the main issue on everyone’s minds will be any movement on the interest rate debate, something that could gain more clarity this afternoon. The strong non-farm figure at the start of the month gave way to a solid string of data for the US last week that included impressive consumer sentiment figures and robust retail sales; if the industrial production data and the Empire State manufacturing and NAHB housing indices can see similar growth there will be increasingly hawkish squawks surrounding the Fed as the week goes on.
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