Syriza Backtrack? UK Economy On Track?New Blog Entry
Good morning. Less than 24 hours after coming into power, it appears that Syriza may have already started backtracking on their primary pre-election stance of hardlining against the Eurozone. Having gained 149 seats and started a new alliance with the Independent Greeks we are now awaiting who will be placed where and should expect talks to begin with the Eurozone imminently.
A debt deal can be done and whilst certain countries are saying no debt will be written off, others such as the Dutch Finance Minister Jeroen Dijsselbloem are hinting that the debt can be restructured without being reduced. A Grexit is not expected but as we have seen in the last few weeks, anything can happen.
If the markets can tear their eyes away from Athens for a minute, then today focus will shift slightly to the UK and Q4 GDp. This is expected to be positive again and we should expect to see 2014 growth hit around 2.6%. This may show that people are underestimating how well the UK economy are performing. The other upside to this is that despite last weeks 9-0 vote against a rate hike, people may start to speculate once again that a rate hike is imminent. I would suggest that it isn’t!
In other news, German business confidence grew for the 3rd month as optimism about an economic recovery continued. One place certainly not enjoying any optimism is Russia, home to the world’s 2nd worst performing currency last year. On the back of more expected sanctions, S&P downgraded the Ruble to junk status.
As well as UK GDP this morning, we have a glut of info coming out of the US this afternoon with Durable Goods Orders, new home sales, PMI and consumer confidence being the headliners.