Another final deadline for Greece

Guarded optimism is the theme today, as the eurozone gives Greece one final deadline.

London
Source: Bloomberg

Greece, China volatility, unexpected management changes at Barclays and the UK budget have provided a busy day for markets. European markets have tiptoed higher as the eurozone lays down the law, indicating that Greece must fall into line by Sunday or get ready to exit the currency union. Investors can hardly be blamed for treating the news with caution, given Greece’s inability to deliver the goods at previous crucial points in this crisis.

China seems to be going through the various stages of grief in relation to the stock market rout. The previous form of the PBoC points to major action on its way at the weekend – so far the fallout has been financial, but any rumblings of political discontent will cause concern in Beijing and increase the pressure to act. It is never wise to fight the market, but there is no shortage of enthusiasm in China for unconventional measures that might stem the tide of selling.

Given the 3% rise in Barclays shares so far this morning, investors seem to be relishing a change in direction at one of the UK’s largest banks; Antony Jenkins certainly put his all into reforming the bank, but even he was unable to effect the change needed, particularly in the arena of cost-cutting. The board has decided that the way ahead lies in an aggressive slimming down of the investment bank, with any new boss being expected to wield the knife quickly and without mercy.

As usual, most of the big surprises in the Budget have been announced ahead of the big day, but there is still the chance that George Osborne will produce another rabbit from his red briefcase to provide some extra bounce to  his poll ratings. Ahead of the open, we expect the Dow Jones to start 200 points lower, as Wall Street tries to recover from a highly volatile session yesterday. 

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