Spreadex Market Update
Eurogroup fails yet again, markets respond in kind
Friday could see the latest set of crisis talks as Greece gets further and further up the proverbial creek without an economic paddle. The Eurogroup are insisting that Greece has until Friday to agree to continue the Troika-dictated bailout terms it is currently operating under. Yet Varoufakis and Tsipras are holding out for a deal that sees both a 6 month extension to the bailout alongside the diluting of certain austerity measures that Syriza deem unacceptable. The Eurozone is perpetually engaged in a game of ‘Grexit’ chicken, with both sides seeing how far they can push the other before the situation snaps. With the ECOFIN meeting to take place today, the markets are set for another day of Greek saga domination, and are already looking decidedly peaky as this unwelcome uncertainty continues to define the economic climate.
The FTSE continued to suffer in the shadow of the Eurozone yesterday, but is looking healthier this morning, no doubt helped by the sustained strong performance by oil, which sees Brent Crude maintaining the upper echelons of $61 per barrel. The UK index’s focus this morning will be the year-on-year CPI figures; inflation is a hot topic across the globe and with the UK the latest country in decline the markets may not be too pleased. However in some quarters, namely the CBI, this low inflation is being pointed to as a cornerstone of the higher-then-expected growth the UK is forecast to undergo in 2015, so it remains to be seen which way the FTSE will swing.
Finally, after the painfully quiet day of trading on Monday, capped off with the depressing sight of another Eurogroup failure, the US indices return to try and spark some life into the markets. After breaking 18000 for the first time in 2015 last week, the Dow Jones will be looking to continue this rally; however, it will have to fight through the deluge of negative Eurozone news, and weather its own Empire State manufacturing and NAHB housing market indices if it is to succeed.
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