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European equity markets are gaining ground this morning as Germany is keen to make a deal with Greece, and even though nothing has been confirmed progress is being made. Germany is prepared to unlock some of the bailout in exchange for Athens making one reform for now. The Greek government is still playing hardball, but now that Germany has made a concession it signals to the market that a deal is just around the corner.
This is a classic example of the Greek debt crisis; both parties were at loggerheads, a deadline was missed and then one side begins to give in, which leads to a deal being completed. Traders are still wary about buying into the market but there are bargains to be had, and the smallest inclination of a deal being made has brought the bulls out of the woodwork.
RBS is trading higher after George Osborne announced plans to reduce the government’s stake in the bank. The taxpayers’ loss is the investors gain, and the perception of the bank will change when Westminster starts to wind down its stake in the finance house. RBS’s share price has effectively been capped as the government holding restricts its capability, and a smaller government influence will attract a different breed of banker to the institution.
We are expecting the Dow Jones to open ten points higher, at 18,010, as the prospect of a deal over Greek debt is keeping sentiment bullish. The US market is still taking its signals from Europe, and if Germany and Greece can come to an arrangement it will be the green light that buyers have been waiting for. Today’s durable goods report will indicate whether US citizens are going out and spending money.