Spreadex Market Update
Greece parliament votes ‘yes’ to deal, ball back in creditors’ court
It was hardly a harmless victory for Tsipras, however; 40 members of Syriza, including the resigned, if still vocal, former-finance minister Yanis Varoufakis, rejected the deal, leaving the Greek PM in a precarious position in his own party. Whilst he likely takes steps to consolidate his position with a cabinet reshuffle this morning, the focus will be on the Eurogroup and ECB, who have some big decisions of their own.
The region’s finance ministers will try and decide where the money for the proposed €7 billion Greek finance bridge will come from in a teleconference this morning, the most likely option still being the (much-opposed) use of the EFSM. The central bank, meanwhile, now needs to decide if it is going to provide the Greek banks with more ELA, with Greece top of the agenda when Draghi holds his latest press conference this afternoon.
Eyes will also be on Germany; with the Greek vote successful (with the French also overwhelmingly voting for the deal on Wednesday) securing the support of the Bundestag is the next big hurdle on the road to a third bailout. Merkel faces a tough task in convincing her SPD coalition partners the deal isn’t too harsh, a task made all the more difficult since Wolfgang Schauble is clinging onto the idea of a temporary Grexit despite the less-than-enthusiastic response it received at the EU summit. Regardless, with the Greek first step complete, the DAX and the CAC opened fairly enthusiastically this Thursday morning.
With little in the way of its own news this morning the FTSE opened flat; slight declines for BP and Rio Tinto didn’t help matters, and even though there is an air of mild optimism surrounding the Eurozone this morning the UK index couldn’t pinch any of that growth for its own cause.
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