Markets Jittery Ahead Of EU Summit In Brussels

Currencies Direct June 27th 2012 - 2 minute read

Markets Jittery Ahead Of EU Summit In Brussels

Markets continue to speculate the outcome of the European Summit set to commence tomorrow in Brussels. Leaders are trying to move towards a fiscal and banking union and closer integration for the troubled Euro economies. UK stocks have swung between gains and losses as this conundrum prevails, in a fairly jittery market. Furthermore, Italian and Spanish yields soared again yesterday causing much alarm just ahead of the EU summit.

German chancellor Angela Merkel has hinted that sharing of debt is ‘counter productive’ as she comes under pressure to provide financial guarantees for weaker economies in the Eurozone. More immediate issues are forming a tranche of 100bn Euros as contingency for banks in Spain, a loan to Cyprus of around 10 billion euros and also working out terms of a more ‘relaxed’ agenda for Greece.

Trading against the greenback, sterling has managed to find a bit of strength but it is not likely to continue for much longer, as Sir Mervyn King has painted a gloomy outlook for the UK economy, with economic recovery not being set to pick up pace until at least 5 years from now. This in the wake of a gradually increasing national debt and lower than expected income tax takings.

The focus today, will be the Mortgage Approvals in terms of data from the UK.  Yesterdays housing figures from the US showed an ailing figure. However, the S&P 500 gained 0.5% with a cautious approach from investors. More certainty and direction is dependent on how the EU summit pans out. Data out today from the US are durable goods and pending home sales.

All markets are very nervy today and as noted the focus is on Brussels and the EU summit on Thursday for any clear direction. Until then, expect a range bound market as the heads of Europe clash to bring their planned reforms to the table.

Report by Amir Khan

The contents of this report are for information purposes only. It is not intended as a recommendation to trade or a solicitation for funds. Currencies Direct cannot be held responsible for any loss or damages arising from any action taken following consideration of this information.

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