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Once again European traders have woken up to widely conflicting reports on how the discussions around Greece have gone. The confident tones coming from Greek negotiators are less than believable, especially as the IMF decided that it was such a waste of time and have headed back to Washington rather than carry on discussions. As the IMF has already agreed to wait until the end of the month for its next €1.6 billion repayment, any more flexibility from them looks unlikely.
It is days like today that could well be the downfall of Greece´s membership in the eurozone. Considering that the Greek economy only accounts for 1.8% of the total eurozone economy, the amount of time being wasted by high level decision makers is outrageously disproportionate. This morning has seen a fresh run on the Greek banks, down almost 8% and the clearest signal that traders believe a default is now even more likely.
Ted Baker impressed the markets posting first-quarter figures sharply improved, with revenues up by over 24% on the back of improving sales both at home and abroad – the shares were up by more than 2% in early trading. Posting impressive figures is now beginning to look like a trend for the fashion chain following last year’s full-year profits which rose by a similar margin.
The news that the UK government had sold off all but the remaining 15% in Royal Mail at 500p has seen this level become an anchor around the company’s neck. The markets could well view any move too far away from this region as likely to trigger the government into selling its remaining stake.
If the US ever feels a little low they need only look across the Atlantic and view the shambles that the eurozone presides over to feel a little better about themselves. Although the pace and strength of the US recovery has come under question over the last few months, the fact is that it still remains and is not under question. How able the US are to go it alone with interest rate rises when so many other countries feel the need to cut is arguably more to the point.
Today will see the producer price index update along with the latest University of Michigan confidence figures released. These are probably not going to be enough to kick start momentum in the US, but more likely to be a reminder that things could be worse.
Ahead of the open we expect the Dow Jones to start 40 points lower at 17,999.