Indices Spread Betting: FTSE 100 Rises on Hopes of Eurozone Solution
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Indices Spread Betting: FTSE 100 Rises on Hopes of Eurozone Solution

Indices Spread Betting: FTSE 100 Rises on Hopes of Eurozone Solution


The wrangling continues in Europe as few details emerged from the weekend over the deal to save the Eurozone from collapse; however the markets are remaining optimistic.

We managed to glean a few bits of information from the discussions, with Italy having its wrists slapped by France and Germany and Germany winning the battle with France to not turn the EFSF into a bank.

Nevertheless, the financial spread betting markets saw little more news than that and the crucial write down of Greek debt has yet to be agreed.

With banks calling for a maximum of 40% write down but some governments calling for more, either way the effect on banks balance sheets will send shock waves through the already tight credit markets.

Lending between banks is already nearing credit crunch status and so it will be hard to avoid when they are asked to undertake an inevitable recapitalisation.

Meanwhile at home, our Dave can expect a harsh message from Eurosceptic MPs as anti-European feelings are whipped up in what will be a very interesting vote in Parliament on whether we should have an EU referendum.

If ever there was a time that for Eurosceptics to pounce on an opportunity for such a vote it’s now and the issue of Europe which has caused so much damage to the Tory party in the past is set to return. For the EU however the last thing it needs is political in-fighting amongst its member states.

Having said that, the indices spread betting markets seem to be remaining hopeful that the European politicians will provide a long term solution to the crisis on Wednesday.

The discussions are likely to dominate headlines this week, but the FTSE 100 seems happy just above the 5500 level.

Earlier we had called for the index to open at around 5540 but by the start of play we had knocked off some 30 points from our call.

Despite the optimism, the FTSE 100 is currently finding it difficult to push beyond the highs of last week and so we are seeing some shorting from our spread betting clients this morning.

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'Indices Spread Betting: FTSE 100 Rises on Hopes of Eurozone Solution' by DB, updated 24-Oct-11

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