Spreadex Market Update
21.05.12 Monday Morning
The joint statement spoke of the commitment necessary to reinvigorate the global economy against the on-going eurozone crisis while accepting a ubiquitous solution as unrealistic, something that echoes succinctly the lack of harmony between eurozone states with respect to a fully functioning fiscal union.
And while it's nice to hear the usual strong words spoken about the resolve and dedication to fostering growth these leaders have being tempered with reality, investors last week highlighted just how unconvinced they are of a clean resolution to the crisis, with major stock indices falling the most over a five day period since August last year.
Today, however, investors and spread betters turn to the likelihood that last week marked a near-term conclusion to the majority of selling to be done by those who would rather sell risk assets ahead of the Greek election later in June.
Indeed, if it can be determined that participants who are likely to sell on the potential, rather than on the fact, of Greece leaving the eurozone have already done so, then investors will be asking an important question: has the market gone too far, too fast in discounting the likelihood of a Greek exit and the effects henceforth?
If so, then it could be a case of spread betting short sellers beware. Some analysts believe that prices are unlikely to head much lower if investors keen to sell have unwound already, leaving short sellers vulnerable to a squeeze if news flows moderately and risk appetite improves. But then that is asking an awful lot.
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