Status Quo Still Rocking All Over The Eurozone
Good morning and welcome to the start of the week.
We should have another interesting week ahead of us with the usual suspects taking centre stage, although with our US cousins taking the day off to commemorate Presidents’ Day and data being relatively thin from the UK, all eyes will yet again be on Greece and the Eurozone.
This all seems a bit reminiscent of last year when we were talking about the likelihood of Eurozone QE and as the days go by without resolution for Greece, the markets don’t seem to know which way to turn. There is certainly a status quo and as they get ready to meet again today, it is clear that an accord is in both parties’ interests. The Eurozone are currently playing hardball as although they fear a Grexit and the uncertainty that this would bring, they also don’t want to be seen to be weak in allowing a country to do as it pleases for fear of contagion. On their side, Greece needs some sort of resolution and as their economic hardship is equated with Euro-enforced austerity, they too need a conclusion as who knows how they would cope with exclusion from the Eurozone.
It will be interesting to see if the Pound continues its gains for the fourth consecutive week as no currency ever goes on a surge without a few setbacks.
Whilst the US are off today, lots of stats have come out recently which aren’t showing a huge amount of positivity as import prices have fallen 2.8% in January, mainly on the back of falling oil prices. Export prices fell 2.0% in January which is the largest monthly decrease since December 2008.