Syriza continue to cause issues for the European establishment

The more the Eurozone finds out about Syriza, the less it likes, with the latest issue being the Greek party’s relationship to Russia.

Eurozone officials are now furiously investigating links between the Kremlin and Alexis Tspiras’ party, and questioning whether Greece has officially opposed sanctions on Russia. This issue is looking like it will be the first big clash between Syriza and the rest of the region, a play-fight before the main event: the renegotiation of Greek debt. The ECB’s Benoit Coeure this morning has ruled out extending Greek debt maturities, whilst Germany’s vice chancellor Gabriel has stated that Troika is not to blame for Greece’s current economic situation and European Parliament President Schulz flies to Athens to greet the new government.

This further drawing battle-lines in Europe is exactly what was to be expected, despite the hope in the Eurozone that Syriza may have taken the slightly more usual political route of not sticking to its policies so staunchly. As each new piece of information leaks out of Greece, the Eurozone indices shed a few more of the points they had gained at open.

Whilst Syriza continues to plague the Eurozone, oil has begun to rear its ugly head once more for the FTSE. As Afren jumped off the proverbial cliff earlier in the week after details were revealed about the extent of its dire financial situation, the cheap price of oil has claimed Royal Dutch Shell as its next victim, with the oil-giant announcing it is to cut investments by $15 billion over the next 3 years. With Brent Crude giving up its $49 per barrel level following another high US crude oil inventories, and copper on its third day of losses and hovering precariously near the lows seen in mid-January, the FTSE is once again being squeezed by its energy and mining stocks. Whilst still in the green for now, the UK index will need a very strong CBI realised sales figure to rescue it from its commodity-based slump.

After the US markets looked expectantly to the Federal Reserve last night, investors were disappointed with a meek announcement that saw the Fed claim it ‘can be patient’ with its decision over raising interest rates, with Yellen saying this patience could translate to revisiting the issue in 6 months. Since the New Year the US economy has struggled to maintain the impressive growth it saw at the end of 2014, and there are fears that the pace it set at the end of last year is unsustainable. Unsurprisingly this rather hawkish statement led the US markets lower, and futures are pointing to no change in direction this afternoon; however a strong unemployment claims figure and pending home sales data may provide reason for a turnaround later in the day.