Spreadex Market Update
Weak US GDP figure adds to negative environment, Eurozone spirals
However, weather-based reasons couldn’t prevent the dollar from taking a severe hit this afternoon, as the euro and the pound gave the greenback a take of its own aggressive medicine. Things will likely be worse for the dollar later today; the current trends in US data is hardly putting together a convincing case for an interest rate raise, and Yellen will likely reflect that sentiment this evening after the Fed meeting concludes.
The pound’s recent performance against the dollar is especially impressive given the fears that it would suffer in the run up to the election; instead cable is now at its highest price in nearly 2 months. Not to dismiss the euro; despite the fact that the chances of Greece leaving the Eurozone are hardly decreasing, the currency has managed to post its own significant gains against the dollar, nearing its own 2 month highs.
The FTSE was at points circling 3 week lows this afternoon, as the UK index suffered under the hands of that weak US GDP figure. Despite a relatively low US crude oil inventories figure of 1.9 million barrels causing Brent Crude to cross the $65 per barrel mark, the FTSE’s commodity stocks continued to be a burden, and left the FTSE with little chance of a strong mid-week showing.
A nightmare Wednesday for the Eurozone saw the region begin to post the kind of losses that it hasn’t seen since, oh, yesterday afternoon. Despite German inflation increasing to 0.3% for April, the fact Greek bank deposits have hit a 10 year low is hardly reassuring, and shows that fears over a Grexit are reaching worrying highs in-country. Given the current climate, it only takes the slightest showing of weakness from the Eurozone indices to cause them to spiral, and with an export-harming strong euro adding to the region’s problems the DAX posted around 300 points in losses.
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