Spreadex Market Update
15.05.12 Tuesday Afternoon
Markets are relatively neutral today as Europe turns to the US session with Monday’s sharp correction to prices against the failure of Greece’s politicians to form a government proving difficult ground from which to bounce.
Investors and spread betters have been actively cutting positions in high-beta sectors such as banking, finance, and basic materials as the relative risks faced by a break-up of the Eurozone have become more likely to happen.
And with banking being so heavily exposed to the root cause of the monetary union’s problems, some analysts are pondering whether Eurozone banks, while trading at significant discounts to assets already, could become cheaper still if a ‘Grexit’ were unavoidable, allowing traders and spread betters alike to continue to position themselves short ahead of further event-driven volatility.
Core retail sales printed slightly worse than expected at 0.1% and looks unlikely to instil a convincing US-led rally into the European close, though US sentiment will be key to price action.
The relentlessly strong dollar seen over the last couple of weeks is taking a pause today, helping dollar-denominated commodities such oil regain some of its heavy losses from last week.
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