Spreadex Market Update
Greek deal reached! says no-one as market losses continue
The drag this issue is having on the Eurozone was perfectly captured by the dramatic declines seen in both the German and region-wide ZEW economic sentiments; hardly a surprise, but still a sign of how pervasive the Grexit fears have become. Fresh 4 month lows from the DAX have receded slightly, but the danger is still there for a classic afternoon tumble if this negative tone persists.
Tuesday has turned into a rather typical day of Greek ‘drama’; claims and counter claims drip out of the news wires to weigh on the appetite of investors. There is talk of a Eurozone summit on Sunday in the increasingly likely eventuality of an impotent Eurogroup meeting on Thursday, whilst the latest reports suggest Greece may not pay the IMF its €1.6 billion bundle at the end of the month if a deal isn’t reached; whether this is more a can’t than won’t situation remains unclear.
The UK’s latest inflation figure failed to be the FTSE’s white knight this morning; coming in dead on expectations at 0.1% but seeing missed targets for core CPI, RPI and PPI input, this round of data saw a slight recovery from the new 5 months low hit after the bell, but not by much.
After the disappointing string of data yesterday afternoon, the Dow Jones managed to improve on the 10 week lows it hit during trading to close at the same limp level it reached last Tuesday. The US futures have seen a similar performance to their European counterparts this morning, with their losses exacerbated by the mild gains for the dollar against the euro and the pound. Last month saw a slight turnaround in building permits and housing starts, but both are expected to slip this afternoon, so the US markets could have another muddled, and loss-filled, Tuesday on their hands.
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