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FTSE -4 points 6627 DAX +25 points at 11124 CAC +12 points at 4848
European equities are set to start mixed this morning as traders dither about what to do going into the weekend. Although we’ve had a couple of sessions that would normally be considered good, over the course this week, we are still significantly down on where we closed last Friday. Naturally, traders are prepping and positioning themselves for a big move; probably after the first exit polls are released. However, don’t expect the result to provide any closure to the enduring Greek crisis, if anything this is just the start.
We are all well prepped, or should be by now, for the fall out of a ‘no’ vote on Sunday. What seems to be overlooked is that a yes vote doesn’t provide any solace either. Although Alex Tsipras said he would respect the result and be in Brussels the next day even if the people voted yes, he would have no mandate and his position would have become untenable and the Syriza coalition with the far right ANEL would likely collapse. Negotiating with Alex Tspiras may have been testing, but given the increasing hardships in Greece and the fact that social breakdown is the breeding ground of extremism; you may hate who you get next.
The nonfarm payrolls data indicated the US employers added 223,000 jobs with the jobless rate falling to seven year low of 5.3%. However there was a downside revision for the previous month and the participation rate, the share of working age population in the labour force fell to 62.6%, the lowest since 1977. So it was a mixed bag which considering a risky weekend sparked some profit taking with the Dow ending 35 points lower at 17,737.
While the European Central Bank made no changes to Emergency Liquidity Assistance for Greek banks, Prime Minister Alexis Tsipras urged voters to choose ‘No’ in Sunday’s referendum. So far the survey suggest the ‘Yes’ camp will have it although it could go down to the wire. The shared currency recovered 32 pips against the greenback to 1.1084.
The number of active US oil rigs rose by 12 to 640 this week, the first advance for this year. That reversed an upward trend sparked by the employment report and the WTI prices finished 37 cents in the red at $56.51 a barrel. Gold prices slumped $2.0 to reach $1166.6 as the nonfarm payrolls figures were interpreted as strong enough to keep the Fed on course to hike rates sometimes this year.
Ipek Ozkardeskaya is a Market Analyst at London Capital Group. She has strong technical background in quantitative finance. Previously, she worked as FX strategist in Swissquote Bank and as a client sales executive at HSBC Private Bank in Geneva. She also developed quantitative models in automatic trading as part of BCV’s Structured Products team. Ipek has a Master’s degree in Financial Engineering & Risk Management and a Bachelor degree in Economics from University of Lausanne.
Marius is a dealer at Capital Spreads. His involvement with CFDs and spread betting started in 2008 after graduating from London Metropolitan University with an MSc in Finance. He provides analysis of the forex, stock index and commodity markets, with a particular focus on oil and gold.
Jonathan is also a dealer at Capital Spreads. Having started his career in the City trading interest-rate and bond derivatives in 2005, he entered the spread betting and CFD industry in 2007 by joining the dealing desk at City Credit Capital. After successfully managing multiple-asset risk books across the European, US and Asian time zones through the height of the financial crisis, he joined Capital Spreads in 2010.
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