UK markets await Greece's next move
The FTSE 100 has been dancing around the 6800 mark this afternoon. The market has gotten over the initial jump caused by the anti-austerity party holding power in Athens, but it is the next move that frightens traders. The Greek stock market has been sent into a tailspin since the election and there is a sense of contagion. For now the rest of Europe is excluded from the Greek tragedy, but if Greece looks to burn its bridges with Brussels the entire continent will be plunged into a selloff.
Diageo is trading higher ahead of the company’s first-half figures tomorrow, and traders will be looking for cost-cutting as the Chinese clampdown on government spending continutes to weigh on the company.
IG is offering a binary market on the outcome of the UK general election, which is currently indicating the conservatives will take 284 seats, and that there is a 74% chance of no overall majority.
US markets claw back losses
The Dow Jones is up 55 points, at 17,445, as the US market claws back some of yesterday’s losses. Traders are looking for the green light from the Federal Reserve that interest rates will remain unchanged for the foreseeable future. The market is anticipating a delaying of any rate rise as the global economy’s gloomy outlook is holding back the US.
Shares in Boeing have hit a one-year high as the EPS smashed analyst’s estimates. A record number of commercial planes ordered in 2014 and steady growth in the defence division ensured the stock got off to a flying start in today’s trading session.
Apple set the tone for US tech stocks when the company posted a record quarterly profit last night, and Facebook will find it a difficult act to follow as the social media giant reports tonight after the closing bell.
Gold loses its edge
Gold is making its way lower as traders don’t want to bank on dovish tones from the Fed, even though the possibility of an interest rate rise from the US in the first-quarter is looking less likely. Gold’s sprint to $1300 at the beginning of the year was heavily influenced by the uncertainty around Greece, and now that the Syriza-lead government hasn’t brought about the apocalypse the metal has lost its edge.
Brent oil is right in the middle of its comfort zone at $49, and the energy is content to trade within a tight range.
World currencies await Fed statement
The euro’s short-term burst back against the US dollar has come to an end ahead of the Fed meeting tonight. The victory for Syriza didn’t bring about a doomsday scenario for the single currency, and now the new Greek government is playing a high stakes game of chicken against Germany. Berlin’s nonchalant attitude towards the possibility of Greece exiting the eurozone is keeping the single currency alive.
Sterling has struggled to hang onto the $1.52 level as traders turn their attention to tonight’s update from the Fed. As the global economy has started 2015 on a soft note, traders will be wondering how ‘patient’ the Fed will be when it comes to increasing interest rates.