Spreadex Market Update
Commodity slump dominates markets on quiet Friday afternoon
Interestingly the biggest news of the afternoon was the disappointing absence of Greek news; instead of the third bailout negotiations starting today, the troika members (i.e. representatives from the EC, ECB and the IMF) didn’t actually turn up, and won’t until Saturday at the earliest.
A defining, singular reason for the holdup is hard to establish; some reports point the finger at differences surrounding what the troika can access, with the triumvirate wanting to look at ministries and files, much to Syriza’s chagrin. Others, meanwhile, have blamed the struggle to find an appropriate venue for talks. The demand from the IMF, in a rather pedantic move, that Greece submit a formal request to the Washington-based institution before it would even consider a third bailout obviously didn’t help speed matters up either. What we do know is that talks will definitely begin at some point and that the delays aren’t based (for once) on any great ideological schism; it still isn’t a great start, however, that the most basic aspects of the negotiations are already causing trouble.
This delay likely played some part in the downturn the DAX and CAC saw this afternoon; however, the most dominant market force this Friday was the latest developments in the commodity sell-off. With Brent Crude still firmly at 3 month lows, copper hovering at a level it hasn’t seen since 2009 and gold looking as bad as it has all week, the FTSE’s big-ticket oil and mining stocks like BP and Rio Tinto emphatically joined in with the global slide into the red, causing the FTSE to forcefully chuck whatever tentative gains it was posting around lunchtime out of the window.
The US markets weren’t immune to the effects to this latest commodity slump either, edging into the red soon after the bell. Even the staggering gains made by Amazon couldn’t prevent the US indices from posting losses, and a hawk-and-dollar boosting flash manufacturing PMI merely exacerbated an already gloomy Friday afternoon for the global indices and commodities alike.
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