By FX Empire.com
The EU Summit and Now the Markets Are Bypassing the Greek Tragedy
The European Union Summit started and ended yesterday, without an agreement from Greece. Markets are wondering what the problems could be, since each side assured the public over the weekend that a deal had been reached.
The EU proceeded forward making great strides in their new “fiscal” union, supported by all EU nations except the UK, who declined to join at during the initial sessions last year. The group of nations, bypassed the Greek situation and moved right ahead with the rest of the agenda.
Greek PM Papademos comments saying Greece is expected to finalize talks about the second bailout package with the EU/ECB/IMF (Troika) by the end of this week.
He added that the Greek country is simultaneously seeking to reach common ground its private creditors on a long-awaited debt swap deal. He said, “Significant progress has been made.”
The problem is we keeping hearing this over and over again.
The markets like the EU summit are bypassing Greece, making it a non event, and moving on to current fundamentals and economic events.
The US economy has shown weakness lately, not enough to slow its growth or move it back to recession, just not as strong as the markets and the politicians would like. Various sectors are doing quite well as exhibited in last week’s Durable Goods reports. This week is a busy week for US economic data and the markets are hoping that there will be good news.
So far this week, German, French and EU reports have been unexciting, coming in at forecast or a bit below, nothing to show any significant upswing throughout the union.
Global Markets traded down yesterday, with the EU and US markets closing down. The Euro dropped against its trading partners, dipping for a bit under the 1.31 level.
The FTSE 100 index fell 62.36 points, or 1.1%, to settle at 5,671.09, with markets extending losses after data showed U.S. personal spending in December was all but flat. European markets were down today. The Stoxx Europe 600 index dropped 0.6% to 253.80, while the German DAX 30 index fell 0.7% to 6,467.21. The French CAC 40 index dropped 0.7% to 3,295.45.
The main focus this week is going to be Portugal. Where yesterday their bond rates soared to a record high, way above a level that is sustainable for the country. Regardless of the politicking, Portugal is going to need additional bailout assistance.
Italy bond sales went well with a drop in the yields.
Asian markets were pretty flat in reaction to yesterday problems with Greece and investors reduced risk appetite.
Gold maintained its price in the 1730’s trading in a close range, while crude oil continues to drop regardless of Iran. Weak industrial figures mean reduced consumption.
Originally posted here
