Spreadex Market Update
Fresh austerity measures for Greece, and generally strong PMIs, fail to buoy Eurozone
Once again the Eurozone has the backdrop of Greek drama. The country’s government last night approving another round of controversial austerity measures (including a rise in VAT and €1.8 billion worth of tax increases) with the aim of unlocking the much-needed €3.5 billion bailout. The Eurogroup should sign-off on the issue tomorrow, just in time for Greece to make the hefty debt repayments it has lined up over summer.
The region also saw a decent set of PMIs this Monday. Whilst French manufacturing remains stuck in contraction territory (at 48.3 against the 49.0 expected), the services sector continued to recover from the decline it saw after last November’s tragic terrorist attack, reaching a 6 month high of 51.8. Germany’s data was similarly strong, with both the manufacturing and services PMIs surpassing expectations. Yet despite arguable wealth of good news the DAX and CAC took another plunge this morning, falling 0.8% and 0.7% respectively as investors’ carried over the saw volatile spirit that plagued last week.
Whilst not quite as negative the FTSE still edged into the red this Monday, dropping 0.2% as Brent Crude saw its own near 1% fall. That leaves the black stuff back under $48.50, dragging the index’s commodity sector down with it.
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