Spreadex Market Update
Eurozone waiting game sucks life out of markets
With the Eurogroup meeting finally (finally!) got underway, the murmurs before the showdown began weren’t flush with positive sentiment. Finance ministers from across Europe chipped in with their opinion, as Ireland’s Michael Noonan remained doubtful, Austria’s Hans Joerg Schelling said that Greece cannot renegotiate their debt, whilst France’s Sapin stated a programme extension would be a ‘good solution’ for the Greeks. As Varoufakis stated that the country has a red line they will not cross, Spain’s de Guindos said they won’t let Greece renegade on its debts. And of course, the Eurozone’s resident grump Wolfgang Schauble said ahead of the meeting that he hasn’t heard anything to be optimistic about.
These obstinate comments aren’t a great sign for the Eurogroup actually reaching a deal. However, and this is the key factor, there isn’t much more time for these perambulations through hypothetical solutions; an agreement needs to be found. Greece is rapidly running of out breathing room, and the instability of this situation isn’t exactly music to the markets’ ears. If anything is to come of today’s meeting, and that is a big if, it will likely be a can kicking move that pushes the real issues down the road.
Over in the UK, things weren’t much better as the FTSE failed to see through the Greek shaped cloud looming over Europe. Even oil couldn’t help, as Brent Crude retraced its steps away from the $62 per barrel level it was trading at earlier. However, Brent did manage to remain above $61, and this allowed the gains by Oils both Premier and Tullow to continue, whilst this morning’s other winners, Vedanta and Jimmy Choo remained unlikely bedfellows in the green side of things as the day went on. The FTSE may want to enjoy its peace and quiet whilst it can, as tomorrow sees its year-on-year inflation figures. Despite the CBI partially attributing its upgraded UK growth forecasts to low inflation, the issue remains a controversial one ahead of the election, and the markets may not be too happy about another slip in CPI.
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