Indices Spread Betting Markets Stabilise After Greek Referendum Inspires Volatility
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Indices Spread Betting Markets Stabilise After Greek Referendum Inspires Volatility

Indices Spread Betting Markets Stabilise After Greek Referendum Inspires Volatility

The Greek referendum inspired blood bath on the financial markets appears to have come to a halt this morning.

Spread betting account holders seem to feel that regardless of what happens in Greece, last week’s EU summit plans will continue to go ahead in order to avoid a default.

Talk that there might even be a military coup in the country really put the jitters amongst the markets and it wasn’t all that long ago that the country was previously ruled by the military in the early seventies.

However, as we saw with Portugal where the government fell whilst receiving their bailout, the EU will continue to do its utmost to impose its plans upon the country regardless of its political make up.

The problem is that this instability is just going to cause more volatility in the spread betting markets.

As we have seen it’s not just the indices spread betting markets that will necessarily suffer, but the bond yields on the PIIGS government debt will spike.

Italian bond yields are comfortably back above 6% and within touching distance of the highs they reached back in August before the ECB stepped in to drive it lower.

Greece is piecemeal compared to Italy if they were to need a bailout, but if it comes to that then the euro would probably have broken up by that stage anyway.

Countries are incredibly reluctant to take the necessary action in order to reign in spending, and reforms in Italy, such as reducing the number of bank holidays, are being met with stiff resistance.

These reforms are needed for the longer term and necessary now in order for the Eurozone economies to be able to emerge from this crisis, whenever that might be, leaner and fitter, so they are more competitive.

Unfortunately this is all at a time when everyone’s economies are continuing to suffer the malaise of the previous recession and jobs are being shed left right and centre.

It may be music to many people’s ears to hear the swathe of job cuts across the City, in particular in investment banking. However, the loss of these highly paid jobs will result in much less tax intake for the Treasury when they need every last penny they can find.

One can only hope that many of these people, who’ll have quite a bit of time on their hands, will start the next wave of entrepreneurialism and new businesses.

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'Indices Spread Betting Markets Stabilise After Greek Referendum Inspires Volatility' by DB, updated 02-Nov-11

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Risk Warning: Spread betting and CFD trading carry a high level of risk to your capital and you may lose more than your initial investment. Spread betting and CFD trading may not be suitable for all investors. Only speculate with money that you can afford to lose. Please ensure you fully understand the risks involved and seek independent financial advice where necessary.

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