Spreadex Market Update
Markets wary over Greek loan proposal
The Eurozone was pushed to a positive close yesterday, even if the tenacity of its gains faded as the day came to a close. Yet things looked less cheery this morning, despite the ECB separately agreeing to €3.3 billion in emergency funds ahead of Syriza submitting a loan proposal to the Eurogroup. The ECB want Greece to introduce capital controls, something the notoriously prickly Varoufakis will likely be unwilling to enforce. And with the Greek loan proposal still to come, there is reportedly little backtracking from Greece in the pro-austerity measures it wants to overturn. If anything is to derail this loan extension request, and that possibility remains ever-present, it will be the perceived lack of contrition and compromise on behalf of Greece, a sticking point for the Eurozone establishment that is growing increasing tired of what it sees as its troublesome child.
Despite strong openings from Rexam, which is on the precipice of signing a £4.3 billion deal with the USA’s Ball Corporation to create a canning-giant, and the latest resurgence of Afren, a stock that makes yo-yos seem supine, the FTSE limped to a weak open this Thursday. The UK index has been spurned by its oily lover, with Brent Crude’s slip to $59 per barrel causing a regression by both Premier and Tullow Oil, whilst copper’s latest fall ate into Vedanta Resources’ previous gains. However the biggest loser of the morning so far has been Centrica, the owner of British Gas, which saw a 35% fall in profits and an unsurprising sell-off thereafter.
The US futures are in the red once more, after the US markets came to a relatively flat close last night. Yesterday’s flurry of weak data alongside dovish comments from the Fed’s Jerome Powell, who emphasised patience in his comments on Wednesday evening, hampered the progress of the Dow Jones, which remains just below its record highs. If the US markets are to reverse yesterday’s slump, they will need an improvement on last week’s jobless claims alongside a much better performance from the Philly Fed manufacturing index, which saw a significant drop-off last month.
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