Greek Elections
The fundamental concern amidst investors is that we may not get any president elected when it comes to Greek parliament votes and this will result in a snap election. Having early elections means more uncertainty for the market and sell-off for the Greek market and if the net outcome of this situation is the election of the anti-austerity party, the state of affairs could change massively provided that we do not get resolution on their austerity program.
The fact is that the systematic problems have been somewhat fixed by Mario Draghi when he delivered his speech back in 2012 and the Greek elections are only a modest piece of the puzzle; however, my biggest concern is, what if we cannot contain the contingency? That could bring immense volatility not only for Europe but for the global economy.
UK Data
The UK economic data was really a mixed bag. The GDP number matched the forecast, so no surprise there, in fact it concretes the view of the Bank of England that external factors are taking the toll on the economy. But, the main highlight was the current account data which has triggered some sell orders.
However, we are confident that under the given circumstances, the Bank of England will increase their interest rate during the next year and the time frame could be during the month of June or July.
Disclosure and Disclaimer: The above is for informational purposes only and NOT to be construed as specific trading advice. Responsibility for trade decisions is solely with the reader.
by Naeem Aslam