Spreadex Market Update
Chinese volatility looms large, Bundestag bailout debate gets underway
The DAX and CAC are looking especially shaky, with the German index already toying with 3 digit declines as it approaches 6 week lows. In will be interesting to see whether any good news over the progress of the third Greek bailout can rouse investors from their bearish slumber and inspire some gains in the process. Yet so far, despite all signs pointing to the success of the deal, the fickle hive mind of the markets has lost interest in the previously dominant Greek saga.
That could change if the Dutch and German votes are successful, with the latter of interest if purely to see how many Bundestag rebels there are; however, the markets have been resistant to Greek good news for the last week and a half, and with the dark clouds of China seemingly only expanding its questionable whether the confirmation of a Eurozone ‘yes’ vote will make much difference to risk-averse investors.
The FTSE is perilously close to its own 6 week lows this morning, as the weight of the commodity collapse continues to crush the UK index. Despite a nascent rebound for Brent Crude and copper this morning both remain at or around their 6 year nadirs, and with the spectre of Chinese volatility looming over the markets these mild gains are unlikely to last for long. Of course, this has merely exacerbated the dismal form of the FTSE’s oil and mining stocks, even if there are a couple of bright spots, namely a robust KAZ Minerals.
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