Spreadex Market Update
Greek banks reopen, normal service not really resumed; gold touches near 6 year lows
But there is a reason why these re-openings merely provide a surface level simulation of a working economy, not the real thing; capital controls remain in place, with the Greek public allowed only €420 a week (a marginal adjustment of the previous €60 a day) alongside a host of other restrictions. The latest developments with the banks provide the backdrop for Greece’s first major repayment since it fell into arrears with the IMF at the end of June; it has a hefty €3.5 billion to give to the ECB, something the country should be able to do as long as there is no holdup with the arrival of the €7 billion bridging loan.
For once, beyond that ECB repayment at some point today, the Eurozone has little in the way of pressing deadlines, at least not compared to the continual Eurogroup meetings and EU summits of the past month. Of course, this isn’t to say that everything is now hunky-dory. Tsipras’ post-vote cabinet reshuffle has shored up his position, for now, but he still faces an uphill battle to hold onto his job. And obviously, there is no third bailout as of yet; that will likely take weeks to materialise, meaning the already arduous Greek saga is set to enter one of its more prolonged moments of speculation. The remaining uncertainty, and the overall lack of data from the region this Monday, has left the Eurozone indices looking rather unenthused after the bell.
The FTSE, like its Eurozone peers, was fairly quiet at open this morning, with very mild gains at open. Until Thursday’s retail sales figures the UK index has very little to play with this week, so will likely be dependent on the movements surrounding Greece and any changes in the commodity sector. Talking of commodities, gold is continuing to have a tough time of it, to put it mildly, at one point falling below $1100 in the Asian session to hit near 6 year lows in the process. The sell-off was reported sparked by 5 tonnes of the stuff being sold on the Shanghai gold exchange within a 2 minute period. It’s just the latest in a series of ignominious defeats for the not-so-safe haven.
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