Spreadex Market Update
IMF wants ‘explicit and concrete agreement’ on Greek debt relief before third bailout participation
The Eurozone took a bit of a back seat at the start of the week, with UK and US GDP figures, and the Fed statement, taking the spotlight off Greece and the region as a whole. That could change this Friday, with Eurozone-wide inflation and unemployment figures the most notable of the morning. More than that, however, is the brewing complications with ongoing third bailout negotiations.
Following a smattering of technical talks at the start of the week, the IMF has come out with one of the most definitive statements since the EU summit deal of a few weeks ago, stating that the Washington-based institution won’t participate in a bailout that doesn’t contain an ‘explicit and concrete agreement’ on debt relief. Whilst the last month has seen the calls for debt relief gain momentum, this is the first stance on the issue that could ignite real change. Wolfgang Schauble both wants the IMF to be part of the deal AND is the biggest obstacle to debt relief, leaving the chance for plenty of Greek fireworks before the tentative August 20th deadline.
The FTSE couldn’t match the growth it saw on Wednesday and Thursday, with Friday’s earnings releases lacking the calibre of the pharma-media-commodity giants from earlier in the week. Lloyds was the most notable company to report this morning, and it seemed to continue a string of strong banking results, with profits for the first 6 months seeing a 38% jump from £863 million to £1.19 billion year-on-year. However, the news that the bank has set aside another £1.4 billion in PPI mishandling provisions reminded investors that Lloyds isn’t out of the woods yet in regards to its bad behaviour, sending the stock nearly 1% lower in the process.
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