Indices Spread Betting Markets Rally Ahead of EU Summit on Fiscal Integration
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Indices Spread Betting Markets Rally Ahead of EU Summit on Fiscal Integration

Indices Spread Betting Markets Rally Ahead of EU Summit on Fiscal Integration

The integration that is due to go ahead this weekend is worrying for all those euro sceptics who fear that more powers will be given up to Brussels.

They have a right to be worried too as the rhetoric out of Europe has hardly been the sort that you’d want to hear.

More rules and regulations as to what countries can and can’t do with the added fear of greater powers to the ruling institutions allowing them to impose punitive taxes on areas that we rely upon to keep growing.

Our Dave has a tough fight on his hands as Britain has one foot in the EU but the other one out of the Eurozone. There’s a danger that a two tier Europe might lead to the core nations having exactly the powers to impose things on the peripheral nations that are unwanted.

Unfortunately for the euro sceptics, deeper integration is inevitable in order to ensure that if the euro is to survive in its current form. The over borrowing and resultant debt crisis cannot be allowed again.

Ahead of tomorrow and Friday’s summit the spread betting markets are hopeful that whatever fiscal rules are agreed will give the ECB more of a free rein to possibly even take on the role of being lender of last resort.

This would draw a line under the whole debt crisis and see a surge in confidence at a time when it is most needed.

Profligate countries are trying to get their houses in order and if two years down the line growth hasn’t rebounded enough so that further bailouts are needed, at least the ECB will be able to step in.

Just for the moment the orchestra’s conductor doesn’t like that idea and for now the percussion and woodwinds are out of sink. Hopefully the summit will get all the players playing the right tune.

Certainly that’s what the bond spread betting markets think and ten year government bond yields have been tumbling significantly in the past few days.

This has led to improved investor sentiment for the indices spread betting markets and has been the main driver behind the Christmas rally so far this December, with the FTSE leading the way.

The London market is up over 2% alone so far this month with the German Dax only a meagre 0.5%. The CAC 40 on the other hand is one of the best performers up over 2.5% but then this index has seen the most declines during the turmoil due to its banking sector.

The big question is whether this rally can be sustained and as existing resistance levels are surpassed, traders look for the next targets to the upside.

With the FTSE at 5625 at the time of writing the next targets over the near term for the bulls are 5650/75 and then 5720.

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'Indices Spread Betting Markets Rally Ahead of EU Summit on Fiscal Integration' by DB, updated 07-Dec-11

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