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Greek Issues, Oil Drops, No Change from UK/Eurozone

Greek Issues, Oil Drops, No Change from UK/Eurozone

When the flow of economic data is quite slow, the markets tend to look elsewhere for direction and take into account geo-political activities and create their own movements. The main market mover is the Greek situation as political instability caused the largest plunge in the Greek stock market since the 1980s. The negative implications for the possibility of a general election are huge as it would most likely see the anti-EU Syriza win which could lead us back to a Pandora’s box of Eurozone uncertainty.

Oil prices which have been steadily falling are also moving the markets and contributing to global growth concerns. The price has fallen a further 5% on the back of weak US demand and Saudi Arabia insisting that it will not curb output. The US Dollar is struggling slightly as investors look to invest in the Yen. However, this is probably a more short-term trend and as soon as we start looking at the interest rate hikes again, the Dollar will return to its normal position as flavour of the month.

News out of the UK and Eurozone is much the same as ever, with Mark Carney repeating the stance of “lets wait and see” and that rate rises would be steady and done when necessary. The “wait and see” approach was repeated regarding QE by Estonian Central Bank Governor and ECB member Ardo Hansson. The normal rhetoric of “too early to decide”, “possible risks outweigh the benefits”, “ impact may be small” were all wheeled out.

It’s a relatively slow news morning with the LTRO being released from the Eurozone this morning and then a slew of data from the US including jobless claims, retail sales and business inventories.

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