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Concerns over Greece for bond markets

Diageo and SABMiller results fail to lift the FTSE 100's spirits. 

London
Source: Bloomberg

UK data set to steal focus

Bond markets have painted a clear picture, leaving little room for doubt as to how worried they are that Greece will default. Short-dated bond yields have hit all-time highs, confirming the old adage that the higher the risk the higher the reward. This increased uncertainty has tainted the enthusiasm of equity traders easing all the major European indices lower.

Tomorrow will see the UK being able to focus on itself rather than mainland Europe as one of the Bank of England’s barometers, hourly earnings, will be released along with the latest unemployment rate. Conspicuous by his absence from tonight’s election debate will be Conservative leader David Cameron. The latest polls continue to point towards a very tight race and IG’s general election binary still makes the 33% chance of a Labour minority government as the most likely outcome.

Spirits company Diageo and brewer SABMiller were both able to toast a solid set of figures this morning, although by day's end the share price action of Diageo rather suggested it might now be drowning its sorrows.

Unilever had the biggest reason for cheer, climbing to the top of the FTSE movers list.

With the increased uncertainty surrounding Greece throwing a little panic into the markets, precious metals miners Fresnillo and Randgold felt the benefits.

US banks see profits

The banks in the US are leading from the front as Goldman Sachs posted its highest profit since 2007, while Citigroup has announced first-quarter profits up by 16%. As much as the headline figures are impressing, it is worth noting that a sizeable amount of funding is still being set aside for regulatory and litigious reasons.

Due to increased spending Netflix's profits fell by almost 50%, however sales were up by 26% and more importantly subscriber numbers jumped by 22%. The markets have focused on the larger consumer base and the increased profitability that this could lead to helping drive the shares higher by almost 15%.

At this stage of the reporting season corporate data is coming thick and fast with Honeywell, Schlumberger and General Electric the headline acts due out tomorrow.

Gold breaches $1200

Escalating worries that Greece will default on its debt and the ultimate decision surrounding its inclusion in the eurozone has helped squeeze gold higher as the precious metal once again breaks above the $1200 level.

Oil prices have continued to creep higher as US refineries have begun to take up surplus crude supply in anticipation of the looming driving season. The last month has seen OPEC remain relatively tight-lipped especially considering how verbose it was at the beginning of the year.

GBP/USD close to overbought area

The dollar is once again going through one of its soft patches as it gives up ground against both the euro and sterling. Last night's Federal Reserve Beige Book looks to have added a little to the momentum that has driven GBP/USD back up to the $1.4900 region and flirting with breaking into overbought territory.

EUR/USD has also crept higher, and at present the almost constant focus on Greece over the last three months has seen currency traders become immune to the recent developments even if it has seen the country’s debt rating downgraded and bond yields skyrocket.     

Denne informasjonen er utarbeidet av IG, forretningsnavnet til IG Markets Limited. I tillegg til disclaimeren nedenfor, inneholder ikke denne siden oversikt over kurser, eller tilbud om, eller oppfordring til, en transaksjon i noe finansielt instrument. IG påtar seg intet ansvar for handlinger basert på disse kommentarene og for eventuelle konsekvenser som et resultat av dette. Ingen garanti gis for nøyaktigheten eller fullstendigheten av denne informasjonen. Personer som handler ut i fra denne informasjonen gjør det på egen risiko. Forskning gitt her tar ikke hensyn til spesifikke investeringsmål, finansiell situasjon og behov som angår den enkelte person som mottar dette. Denne informasjonen er ikke utarbeidet i samsvar med regelverket for investeringsanalyser, så derfor er denne informasjonen ansett å være markedsføringsmateriale. Selv om vi ikke er hindret i å handle i forkant av våre anbefalinger, ønsker vi ikke å dra nytte av dem før de blir levert til våre kunder. Se fullstendig disclaimer og kvartalsvis oppsummering.

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Denne informasjonen er utarbeidet av IG, forretningsnavnet til IG Markets Limited. I tillegg til disclaimeren nedenfor, inneholder ikke denne siden oversikt over kurser, eller tilbud om, eller oppfordring til, en transaksjon i noe finansielt instrument. IG påtar seg intet ansvar for handlinger basert på disse kommentarene og for eventuelle konsekvenser som et resultat av dette. Ingen garanti gis for nøyaktigheten eller fullstendigheten av denne informasjonen. Personer som handler ut i fra denne informasjonen gjør det på egen risiko. Forskning gitt her tar ikke hensyn til spesifikke investeringsmål, finansiell situasjon og behov som angår den enkelte person som mottar dette. Det er ikke utarbeidet i samsvar med lovens krav for å fremme uavhengighet av investeringsanalyse og som sådan er ansett av å være markedsføringskommunikasjon. Selv om vi ikke er hindret i å handle i forkant av våre anbefalinger, ønsker vi ikke å dra nytte av dem før de blir levert til våre kunder.