Spreadex Market Update
More Greece/Eurogroup talks tabled for tomorrow
With Greece submitting its loan proposal this morning, the well-oiled Eurogroup meeting machine arranged emergency talks between the region’s finance ministers, who must be missing each other dearly, for Friday afternoon to discuss the details of the Greek request. The Eurozone indices responded as expected, pushing into the green as the day continued, whilst the Athens stock exchange and the Greek banks were also enlivened by the semblance of progress that has appeared this morning.
Yet with reports suggesting that the Greek proposal is more conciliatory than first thought, the instability may not be over yet. If Syriza do accept the revised agreement the Eurogroup are likely to present tomorrow, the party may find it difficult to hold on the electoral support they have gained in the past few weeks, however much they insist the 6 month loan extension was part of their plan. A continuation of the current bailout stipulations is the opposite to what the Greek people voted for, and just as the situation on the continent may be cooling, Syriza may now face rising displeasure at home. There are also issues surrounding the permanence of this solution. The loan extension is effectively a giant piece of duct tape over the smashed Eurozone window that is Greek debt; it’s a short term fix but guaranteed not to last. However for now, as had been the case so often recently, the Eurozone markets remains blissfully short-sided about the positives of this potential deal.
With the Greek situation appearing to reach some kind of short-term solution, the FTSE edged into gains, as CBI industrial order expectations were better than expected. However a full blown rebound was prevented by the continued declines of oil, as Brent Crude threatened to dip below $59 per barrel, leaving Premier Oil and Tullow Oil in the red. They were joined by continued losses for Centrica, as well as Hunting, Vedanta and Drax all suffering as Thursday afternoon approached, meaning the FTSE is in sore need of a positive US injection if it was to increase its gains by today’s close.
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