Ja or Nein?
The German parliament is due to vote today on backing the bailout programme for Greece. The expectation is that the green light will be given; in test ballots both the Conservatives (Chancellor Angela Merkel’s party) and the coalition party, Social Democrats, voted heavily in favour of the talks Consequently, the result will probably be pretty straightforward. There is still a lot of opposition to the notion, though, judging by German headlines today exclaiming German grandchildren will pay for the bailouts.
To the East then. We see that the Asian stock market has seen support from the recovery in China’s markets. There is continued use of what is being called the ‘National Team’. This is a term used to describe the funds, brokers, government agencies and banks that buy into the market to restore investor confidence. These parties seem to have continued to buy shares today in order to support markets and restore values. At the same time the US Dollar continued to gain versus the Euro and the Yen, which could all point to renewed pressure on a possible interest rate rise in the States by the end of the year.
In the UK, Bank of England Governor, Mark Carney began to talk again about rate increases for England. In June last year, he talked about potential rises that might be sooner than expected and yesterday commented that a ‘time for an increase is moving closer’. This pushed the Pound higher and at the same time pushed yields on UK debt and the FTSE lost some ground too. We learned that CPI in the UK was 0% last month, and today we will look to jobs and wage information which could continue the trend we have seen lately given their steady performance in the last year and a half.
In economic news, we have American inflation information and some housing data too. Apart from that, we learn of Canadian inflation data and also there are some minor American addresses to come as well. Apart from that, it’s the major stories that continue to dominate market sentiment.