Xanadon’t at the moment
The Pound has now lost quite a bit of ground against the Euro and a little against the Dollar. The Greek situation appears to be drawing to a kind of close – in that the underlying issues are not even close to being addressed and resolved, simply the mechanism for funding has been begrudgingly agreed. The Pound has now pulled back under the 1.4000 figure and, while not moving quickly, it is a confident trend.
As expected, the situation in China is far from resolved and the level of intervention always posed risks to the stability of their stock market. We saw a measure of support for the strength of the stocks from the government programme. This began to lose momentum and run out of steam (as it was bound to do) and selling ranged from closing losses to taking profits. There are more and more concerns surfacing about the general state of the Chinese economy and where the future of their monetary policy lies. The result of this was the biggest single day drop of the value of their stocks in over eight years.
As the Greek situation draws closer to resolution (as far as funding goes), the attention can now return to the broader challenges faced by the Eurozone. The focus will be on both the general performance and the specific impact that Greek issues have had on the remainder of the bloc. On one hand, the exporting countries will be receiving some benefit from the weakness in their currency from the Greek crisis and, coupled with the Quantitative Easing programme, will be buoyed by the trade and economies offered by the increased flows. On the other hand, joblessness is still rife and there is still far from adequate price pressure throughout the Eurozone. Consequently European Central Bank chief Mario Draghi has a lot to do.
Today in economic news we have only US Durable Goods data to arrive. This is a measure of the value of orders for items intended to last for three years or more (e.g. cars). These can tend to be bigger ticket items and so are a little more sensitive to the economic situation than perhaps other measures. It’s unlikely you are going to buy a big screen television if you think that you may not be able to afford food in the coming weeks.