Greece troubles negates bullish bid talk
Downside pressure on sterling and bid talk is keeping the FTSE 100 elevated relative to its European counterparts today. Trading fairly flat on the day, the index is barely hanging on to the 6800 level by a thread. The largest upside moves in the index heavyweight; Vodafone (LONDON:VOD) and Diageo (LONDON:DGE) have added 4 and 12 points respectively in early trade. How sustainable these moves are remains to be seen.
The pound is back under pressure and the downside looks set to prevail as bullish momentum continues to drive the greenback higher on monetary tightening speculation. News that President Obama had commented on the strength of the US dollar were quickly denied.
One would almost feel sympathy for any company CEO that watches the share price explode higher on his departure. Deutsche Bank (XETRA:DBKGn) rallied 8% on news that former UBS CFO, John Cryer was to replace Anshu Jain and Jurgen Fitschen. It hasn’t been enough to push the DAX into positive territory – the index is down 0.44% on the day.
With Greek worries still haunting investors with the European Commissioner stating that alternative proposals must be found if a deal is to come to fruition. It’s the last day and yet the G7 leaders have yet to reach a compromise that unlocks bailout aid for Greece. and until accord is reached we can expect market jitters to continue.
This notion remains well reflected in the bond market volatility – despite a failure to move through the 1% mark last week, the German 10-Year yield seems to be coiling up for a move higher today.
We are looking for the Dow to open 10 points higher at 17859. The strong dollar may well start to bite and profit taking seems a likely scenario today.