Spreadex Market Update
Optimism remains high as markets continue Greek-hope rally
Whilst the EU summit, as expected, failed to yield a concrete deal last night, the rhetoric coming from the region suggests that a solution by the end of the week, and importantly before the sticky €1.6 billion repayment situation of next Tuesday, is the current aim. EU luminaries Juncker, Tusk and Moscovici were all in varying states of optimism last night and this morning, with this hope transferring to the markets as the DAX reached a 3 week high after the bell.
Yet as predicted, the shift towards creditors’ demands has left Tsipras an unpopular man at home. Concessions on VAT and pensions, two of the biggest sticking points of the past few weeks, may have helped endear the Greek PM to Merkel, Lagarde and co., but it leaves him with the unenviable prospect of selling this proposal, which has already sparked fears in Greece that it will sap any remnants of growth out of an already stagnant country, to the Syriza-filled parliament. The VAT hike especially is being pointed to as a job-killer, something that would be lethal for a country where a quarter of its people are unemployed. For all the market optimism, there are still a lot of people, on either side of the debate, that need to be convinced of the current direction.
The FTSE followed the Eurozone’s lead, if with slightly less gas in its tank as it had yesterday, pushing the UK index to a 1 and a half week high in the process. Beyond the indices, the biggest winner this morning was clearly Ladbrokes; confirmation this morning that the betting company is in talks with rival Coral pushed the stock up by nearly 11% to a 9 month high, and brings the latest set of merger talks to an M&A busy gambling sector.
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