Spreadex Market Update
Sell-off slows down as markets await debt-filled Tuesday
This is not to say there has been a complete turnaround; the DAX is still 3.5% down on the day, with similar losses across the region. There has been very little news today for the markets to chew on, beyond the overwhelming negative sentiment that has settled in for the day.
Hollande has insisted there are still a few hours for a deal to be made whilst Merkel stated that Greece has to make the first move; Juncker, meanwhile, remained adamant that the Eurozone would keep all its 19 members despite feeling ‘deeply saddened’ by how the issue has progressed. These comments capture the all too familiar inertia at the heart of this situation, and do nothing to suggest the messiness on the horizon can be avoided. It currently feels like the relative calm before the potential storm tomorrow as Greece gets ready to almost inevitably fail to meet its IMF payment.
Whilst the Eurozone indices gained another percent from their lows, the FTSE couldn’t managed the same feat, only being able to take off around 0.4% of its Monday morning nadir. The banking and travel sectors remain deep in the red following the weekend’s events, but like the indices have reduced their losses from the excesses of this morning.
Despite the bearish tone on the markets, the Dow Jones futures are still positive ahead of the open. Whether this can last after the bell is unclear; it will likely be dependent on how the dollar continues to react to the Greek situation. The greenback is fairly flat against the pound, but is taking a hammering from the euro as it regains the ground from the 3-week low it hit on Sunday following the confirmation of the referendum and the announcement of capital controls.
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