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Early enthusiasm is fading fast on indices, despite the usual Monday morning bounce. Greece has declared that its payment last week to the IMF had effectively cleaned out one of the last reserves of cash available, although given its ability to keep pulling rabbits from hats this little trick might get employed again.
Fortunately corporate activity in London is helping to maintain interest in a day that would otherwise match the London weather – relatively dull and uninspiring. Opening trading in BHP Billiton’s South32 spinoff hardly matches the fun and games we saw when Glencore arrived back in 2011.
The commodity boom of the first decade of the 21st century seems like a distant memory, and in a world of slowing growth most investors will opt to wait until the company has proved it can survive on its own before rushing to back it with their own cash. 888 Holdings has now confirmed it was one of the parties bidding for bwin.party digital, but the limited read-across to other sectors in M&A terms means we can hardly rely on this news to energise a lacklustre session.
Another record week for US indices helped to offset the weakness seen in the eurozone, but we could see a bout of rangebound trading hit Wall Street, at least until Wednesday. The middle of the week sees the release of the minutes from the latest Fed meeting; given the stark downturn in data from the US investors will be keen to know whether any of the hawks on the committee are feeling more cautious.
Any sign that the committee has been unmoved by the run of poor numbers could leave US markets looking rather overexposed. Ahead of the open, we expect the Dow to start practically unchanged from Friday’s close, at 18,271.