Spreadex Market Update
US GDP figure bad, but not too bad, whilst Eurozone sees losses widen
Bad weather and dollar-damaged exports, which fell by 7.6% to leave the biggest trade gap for 30 years, were the main culprits for this dismal first quarter figure. However, since cold weather won’t be an issue for the second quarter and increased consumer spending should kick in as oil prices remain low, the dollar shrugged off the Q1 contraction.
This first quarter GDP figure existed in a weird grey area this Friday, especially after a poor Chicago PMI and better than expected consumer sentiment data cancelled each other out. The GDP news wasn’t bad enough to harm the greenback and therefore help the Dow, but simultaneously wasn’t good enough to compensate for the lack of dollar declines in its wake, leaving the US markets to wallow in the red as Friday continued.
The Eurozone doubled down on ending the month in the doldrums, increasing its losses as the day went on without any fresh hope of a Greek deal coming to fruition. Despite Wolfgang Schauble clarifying that the deadline for a solution is June 30th, this slight date shift doesn’t change the fact that Greece looks increasingly unlikely to make next Friday’s IMF repayment. And with the region being chastised by US State Secretary of the Treasury Jack Lew for its lack of progress on the issue, Greek spokespeople (and, oddly, Jean-Claude Juncker) were the only ones sounding bullish this Friday.
The FTSE effectively gave up as Friday wound down, losing any minor gains it had been making during the morning to sleepwalk its way to the month’s end. With the US GDP figure failing to cause much of a ruckus, and the Eurozone remaining fairly schtum on the Greece, the UK index has very little to play with as the week came to a close.
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