Spreadex Market Update
Greek debts and Spanish elections weigh on markets
The usual Greek jitters were joined by market worries arising in Spain. Growing anti-austerity, anti-establishment sentiment in Spain made itself felt at the weekend as the ruling Popular Party were, well, not so popular as they gave up ground to Podemos and Ciudadanos. The biggest coup was the ascension of the anti-poverty campaigner Ada Colau to mayor of Barcelona, as Popular failed to secure a majority in any of the nine regions holding local elections.
Of course, Greece isn’t one to be outshone, and the euro continued to fall this Tuesday with many blaming Yanis Varoufakis after Greek finance minister pointed the finger at the country’s creditors on Monday, claiming that their wish to impose further austerity on Greece as the cause of the stalemate. Even at such a critical hour there apparently remains a completely lack of agreement between Greece and its creditors, with the very real fears that it could default next Friday helping cause the current bearish situation on the markets.
Despite CBI realised sales smashing expectations, the FTSE failed to escape the gloomy atmosphere this Tuesday, as both the UK index and the pound replicated the losses seen in the Eurozone. Declines for oil only exacerbated matters, as Premier Oil, Tullow Oil and Cairn Energy all sat firmly on the top fallers list.
The strength the situation in Europe is giving the dollar hasn’t helped the US futures which have slipped to similar, if less extreme, losses as those indices this side of the pond. Yellen implied last Friday that the Fed is ready to raise rates at some point in 2015, if not at the originally tabled June date, as long as the central bank sees consistent improvements in the US economy. This helped to give the dollar extra juice against the European currencies, something that could increase if this afternoon’s flurry of US data (including durable goods orders and consumer confidence figures) comes in higher than expected.
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