Stage set for Eurozone Ding Dong
27 January, 2015
Robin Haynes
In the aftermath of Syriza’s victory in the Greek elections, the stakeholders in the tussle for the Eurozone’s future started to set out their stalls yesterday. German ministers were quick to confirm that Greece must still meet its debt repayment requirements, a spokesman saying that Greece must “take measures so that the economic recovery continues”, while the Finnish prime minister is against writing off any debt, and Jeroen Dijsselbloem, president of the Eurogroup, said yesterday that “there is very little support for a write-off in Europe.”
The problem for Germany, the ECB and the rest of Europe, is that Syriza is on a collision course with them and will insist on some debt restructuring, if not a write-off. And Greece’s current funding runs out next month, when another €7bn of its bailout is due.
Unsurprisingly, the Euro remained weak in trading yesterday, briefly reaching an 11 year low against the Dollar, and remaining at post-financial crisis levels against the Pound.
There is far to go before we will know the long term effects of the election result; but Syriza leader Alexis Tsipras helped calm investors’ nerves when he said in a speech that he wanted negotiation, not confrontation, with Greece’s creidtors. There has also been talk of the Eurozone becoming stronger if Greece were to refuse to accept any terms offered by its European counterparts, and was forced to leave the single currency.
For now, we have had 3 very significant events this month: the Swiss National Bank removing its Euro cap, the ECB’s larger-than-expected QE programme and the Greek election results; these have combined to give us extremely good rates for sending money to France, Spain and the rest of the Eurozone. While there is likely to be more volatility ahead, we may well have seen the biggest moves already.
UK GDP released today
Today we have the first official estimate of UK GDP for the fourth quarter of 2014, which is expected to show quarterly growth of 0.6%, down from 0.7% in Q3. However the annual figure could be as good as 2.8%, which would take the headlines and if reached may give the Pound some strength in morning trading. As always though any shortfall in the expected figures could easily impact on exchange rates, especially given sterling’s recent rise against the Euro, and Canadian, New Zealand and Australian Dollars. Watch out for market movement when the announcement is made at 9.30am.
Elsewhere today we also have US consumer confidence and durable goods orders, out this afternoon.
Archive
- 2020 (59)
- 2019 (190)
- 2018 (229)
- 2017 (253)
- 2016 (254)
- 2015 (253)
- 2014 (252)
- 2013 (287)
- 2012 (270)
- 2011 (576)
New Articles
- Brexit deal to be done, or going, going, gone? 25 November, 2020
- Sterling starts the week down from the highs of last week 16 November, 2020
- Votes are in – albeit still being counted, will Donald trump Joe? 4 November, 2020
Categories
- No categories