In mid-morning trading the FTSE has shed all its initial gains, and is now edging lower, down around 5 points.
For the second week in succession, euphoria over apparent progress in the Eurozone has lasted for only a few hours.
Last night’s Greek election saw the pro-bailout New Democracy party edge just ahead of its anti-bailout Syriza rival. This means that, at least for the moment, Greece is no longer headed straight for an exit from the Eurozone.
However, this isn’t the beginning of the end for Greece, in fact, to paraphrase Churchill, it probably isn’t even the end of the beginning.
New Democracy will now try to patch together a ruling coalition, although any government will be shaky at best.
Whilst the Germans have hinted at an extension of time lengths for Greek austerity efforts, they are sticking to their guns on the severity of the measures needed.
In summary, we are really no further along than last Friday, and the spread trading markets have reflected this.
Last week’s relief rally lasted barely a day, this one has been even briefer.
Spanish and Italian yields have begun rising once again, while most indices spread betting markets are now back in the red.
US futures are signalling a weaker start for Wall Street and, with no major events on the horizon, it that seems the bears will predominate for the time being.
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Financial Market Comments from Chris Beauchamp, Market Analyst, IG Index.
The above comments do not constitute investment advice and Clean Financial accepts no responsibility for any use that may be made of them.
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