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FTSE struggles as Varoufakis falters in Germany

The FTSE 100 has struggled to gain a sense of direction as Greece’s troubles in Germany and higher oil prices have swung investor sentiment. 

Greek flag
Source: Bloomberg

Schauble ignores charm offensive

Greece has not had the greatest day following the decision of the European Central Bank to remove its bonds from those eligible for quantitative easing, at the same time as Yanis Varoufakis’s roadshow came to a grinding halt in Germany — German finance minister Wolfgang Schauble was always going to be the most unlikely to be swayed by his charm offensive.

The last few days has seen investors in the Greek banking sector suffering from a delayed reality check following the consequences of an anti-austerity government taking control of the country. Following today’s announcement by the Bank of England that interest rates were remaining unchanged, we are now just one month shy of six straight years of a 0.5% base rate. 

Subsequent to the announcement that Ball Corporation is in discussions with Rexam valuing the company’s shares at £6.10, the stock jumped by 24% in early trading. The deal would be made up of two-thirds cash and one-third shares in the US-quoted company.

This rather stole the thunder from BT as it took the opportunity of its quarterly figures to announce that it had agreed the £12.5 billion acquisition of EE from Deutsche Telekom and Orange.

Unsurprisingly both Vodafone and TalkTalk stated that competition authorities should look into the matter.

AstraZeneca saw its shares fall as fourth-quarter figures did little to inspire investors, while over in America previous suitors Pfizer announced a $15 billion acquisition of Hospira making the chances of renewed interest in the UK pharmaceutical company much less likely.

Twitter and LinkedIn to announce after close

Today’s US corporate data has a distinct social media feel to it with both Twitter and LinkedIn set to update the markets after the close. The eternal battle of converting registered subscribers into some sort of monetised income has eluded many a tech sector stock before it.

Also out, but less likely to gain as many headlines, is Expedia and GoPro. The relatively quiet corporate calendar has only added to the focus being shifted to tomorrow's non-farm payrolls and unemployment rate, especially as they have the tendency to spark the markets into life.

Brent adds 5%

Gold continues to fall out of the spotlight as it has traded below $1260 — the over-exuberance of the last three month's moves are still being eaten into.

After the aggressive selloff in oil yesterday there has been an almost equally aggressive bounce today with both Oil - Brent Crude and Oil - US Crude adding 5%.

The boost that yesterday’s Chinese government reduction in reserve requirements gave to copper has been short-lived as markets have already begun to discount the benefits. 

EUR/USD weighs on traders' minds

The last twelve months have not offered many days where the dollar has dropped by more than 100 pips against both the euro and the pound, but today is one such occasion. The last month's trading had suggested that the $1.52 level in GBP/USD might be a barrier to higher levels but the relative ease with which it has been broken has only encouraged the momentum traders to challenge the 50-day moving average resistance too.

The quotes coming out of Germany today, as finance ministers Wolfgang Schauble and Yanis Varoufakis have discussed Greece’s debt burden, have given EUR/USD traders plenty to think about. To date, the hardline German stance has shown little sign of easing.

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