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Shell announces more cuts
The last few days have seen investors in the Greek banking sector suffering from a delayed reality check from the consequences of an anti-austerity government taking control of the country. The very real possibility of a separation from the eurozone and the Troika taps being turned off has seen prices of Greek banks plummet.
This week’s selloff appears to be squeezed low enough to tempt the buyers back in, triggering a bounce of 13%. This pre-emptive doomsday scenario that Greek banks have played out has done the Troika’s arguing for it.
Not that one is needed but tomorrow’s eurozone inflation figures should keep nerves on edge, especially as today’s German figures showed that inflation came in lower than expected.
Shell, on the other hand, has announced a further $15 billion in spending cuts as low oil prices see an increasing number of operations becoming unviable. As much as the oil major tried to divert attention away from these spending cuts by maintaining its dividend, the shares have spent most of the day down by 5%.
Fresnillo has also suffered as the silver mining company has seen the commodities spot price look that little bit less precious over the last 24 hours.
Alibaba's earnings disappoint
US corporate data continues to come thick and fast, and the pre-market results from Alibaba triggered an aggressive selloff in the shares. The rate of revenue growth came in short of expectations, and within the first 30 minutes of trading Jack Ma’s company was down by over 9.5%.
Ford also posted fourth-quarter figures, and an increase in global car sales has helped drive pre-tax profits up by $55 million to $423 million.
The last couple of days have seen an improvement in the companies beating market expectations for the earnings per share, while at the same time seeing falling revenues. It is looking increasingly likely that markets have been spoilt over recent years with the US reporting season seeing 70% or more companies posting better-than-expected figures; however, this time around they are not expected to be so charitable.
After the US markets close today both Google and Amazon will post quarterly updates, and even though the bar has not been set too high it has not stopped a number of the major US equities tripping up.
Gold retreats from $1300
Gold has given back more of its recent gains as the air above $1300 has been far too thin for many traders. The length of this selloff may well be down to the destabilising actions of the new Greek government.
Copper has bounced off of January’s lows but still remains entrenched in a bearish mindset.
Brent crude has flirted with the idea of breaking back above the $50 level but without the fundamental demand to back it up this looks more of a forlorn hope.
Euro bounce continues
The bounce in EUR/USD has continued today but it is hard to believe this is anything other than a very short-term correction, having been so heavily oversold. Yesterday’s Federal Open Market Committee statement has shown the Fed is not ready to pull the trigger on interest rate rises just yet but are still monitoring the situation.
With a little less negativity coming from UK economic data the pressure on GBP/USD has been more subdued, but like the euro traders would struggle to find too many reasons for a sentiment change.
EUR/CHF traders’ frustrations are increasing as it continues to climb higher after the dramatic moves triggered by the Swiss National Bank’s unpegging of the currency pair.