Spreadex Market Update
FTSE flat(ish) ahead of GDP data; Schauble pours cold water on yesterday’s deal hopes
The initial estimate for the UK’s first quarter GDP was 0.3%, a disappointing figure but one that reflected the GDP landscape of much of the Western world. This morning’s second estimate, however, is expected to see that figure increase to 0.4%; still the slowest quarterly growth since the first quarter of 2013, but an improvement nonetheless. Unsurprisingly, after yesterday’s afternoon surge left the FTSE roughly level for the abbreviated week the UK index has opened flat as investors wait to see how that GDP figure turns out.
One of the catalysts for Wednesday’s robust rally were reports, including those from Alexis Tsipras himself, that Greece is nearing a now near-mythic deal with its creditors. However, some cold water was poured over this claim last night as Greece’s most regular sparring partner, German finance minister Wolfgang Schauble, claimed he is ‘always a bit surprised’ to here reports that a deal is ever closer since negotiations ‘still haven’t come very far’. This change in tone, or at least parallel tone, over the issue has made itself felt on the Eurozone indices this morning, which were a reddish shade of flat after the bell.
There was no sugar to help the bitter pill of fallings earnings for Tate & Lyle this morning; after three profit warnings between this February and the last the sugar company posted some dismal full year figures. Profit before tax fell 28% to £224 million, whilst sales fell 11% and earnings per share dropped 29% to £0.377. The cherry on top was Tate & Lyle’s warning that after a ‘very challenging’ year it expects no real uptake in the next 12 months as the company desperately tries to restructure its business. This led to immediate losses for Tate & Lyle as the company fell to its worst price since its last profit warning in February.
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