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Greece passes austerity measures, as markets recover from Trump slump - business live Greece passes austerity measures, as markets recover from Trump slump - as it happened
(35 minutes later)
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Closing summary
Time for a quick round-up.
Ahead of Monday’s eurogroup meeting, Greek MPs have passed a series of new austerity measures introduced to help release the latest tranche of bailout funds from the country’s creditors. While the forthcoming get together of finance ministers is likely to be a long and possibly contentious one, the Athens stock market welcomed the Greek vote and is currently up 0.25%.
Other stock markets are also ending the week on a positive note after the mid-week slump following the latest controversies surrounding Donald Trump. On Wall Street, the Dow Jones Industrial Average is forecast to open marginally higher, up around 30 points.
Meanwhile oil has moved higher on hopes that next week’s Opec meeting will sanction an extension to November’s agreement to curtail production.
In the UK, the CBI has reported that factory orders in May were at their highest level since 2015.
The pound has been hovering around the $1.30 level for the second day in a row.
And on that note, it’s time to close for the day. Thanks for all your comments, and we’ll be back next week.
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Looking ahead to Monday’s eurogroup meeting, which will discuss the Greek debt situation (yet again):Looking ahead to Monday’s eurogroup meeting, which will discuss the Greek debt situation (yet again):
Eurozone diplomat predicts long and difficult Eurogroup on Greece to find solution on debt that everyone can accept.Eurozone diplomat predicts long and difficult Eurogroup on Greece to find solution on debt that everyone can accept.
Diplomat urges presence of @Lagarde as this is crucial phase of negotiation and deal would need her authorityDiplomat urges presence of @Lagarde as this is crucial phase of negotiation and deal would need her authority
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The pound is now back above $1.30, up 0.57% at $1.3009. Chris Saint, senior analyst at Hargreaves Lansdown Currency Service, said:The pound is now back above $1.30, up 0.57% at $1.3009. Chris Saint, senior analyst at Hargreaves Lansdown Currency Service, said:
The pound lost ground yesterday afternoon but remains on course for weekly gains against the US dollar, having tiptoed back above the psychologically important $1.30 level in early European trade today.The pound lost ground yesterday afternoon but remains on course for weekly gains against the US dollar, having tiptoed back above the psychologically important $1.30 level in early European trade today.
The lingering political storm in the US surrounding President Trump continues to heap some pressure on the dollar, casting doubts over whether he can deliver the pro-growth economic reforms which were supporting expectations for the Federal Reserve to carry on lifting interest rates gradually this year.The lingering political storm in the US surrounding President Trump continues to heap some pressure on the dollar, casting doubts over whether he can deliver the pro-growth economic reforms which were supporting expectations for the Federal Reserve to carry on lifting interest rates gradually this year.
Sterling is having a harder time against the euro and changes hands at €1.1648 at noon, putting it on track to finish the week below €1.17 for the first time since Theresa May announced next month’s snap general election.Sterling is having a harder time against the euro and changes hands at €1.1648 at noon, putting it on track to finish the week below €1.17 for the first time since Theresa May announced next month’s snap general election.
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European markets are managing to stay in positive territory, while on Wall Street the Dow Jones Industrial Average is forecast to open marginally higher. Connor Campbell, financial analyst at Spreadex, said:European markets are managing to stay in positive territory, while on Wall Street the Dow Jones Industrial Average is forecast to open marginally higher. Connor Campbell, financial analyst at Spreadex, said:
The gentle return to positive trading continued this Friday, the European indices all reclaiming some of the week’s losses.The gentle return to positive trading continued this Friday, the European indices all reclaiming some of the week’s losses.
The FTSE kept hold of its 30 point rise as the morning progressed, though the UK index still couldn’t find the energy to re-cross the 7500 mark. The pound was even perkier, surging half a percent against the dollar to once again surpass $1.30...The FTSE kept hold of its 30 point rise as the morning progressed, though the UK index still couldn’t find the energy to re-cross the 7500 mark. The pound was even perkier, surging half a percent against the dollar to once again surpass $1.30...
The CAC actually ended up being the morning’s best performer, the French index jumping 0.6%; the DAX was less enthused, rising 0.3% to clamber over 12600. Neither the Eurozone indices, nor the euro itself, seem too fussed by the news that Greek MPs passed the latest austerity measures required by the eurogroup; investors instead enjoying the lack of Trump/Russia twists and turns.The CAC actually ended up being the morning’s best performer, the French index jumping 0.6%; the DAX was less enthused, rising 0.3% to clamber over 12600. Neither the Eurozone indices, nor the euro itself, seem too fussed by the news that Greek MPs passed the latest austerity measures required by the eurogroup; investors instead enjoying the lack of Trump/Russia twists and turns.
Talking of Trump, the Dow Jones is in for its own green open – just. The futures have the Dow nudging 0.1% higher after the bell, keeping the US index a few points away from the 20700 mark and roughly 300 points away from Tuesday’s highs.Talking of Trump, the Dow Jones is in for its own green open – just. The futures have the Dow nudging 0.1% higher after the bell, keeping the US index a few points away from the 20700 mark and roughly 300 points away from Tuesday’s highs.
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The pound has edged up above $1.30 for the second day in a row, but can it hold on to that level?The pound has edged up above $1.30 for the second day in a row, but can it hold on to that level?
Watch #GBPUSD around 1.3000 - yesterday's temporary break above this hurdle was rejected. Was that a false break reversal? #FX ^FRWatch #GBPUSD around 1.3000 - yesterday's temporary break above this hurdle was rejected. Was that a false break reversal? #FX ^FR
Now that #GBPUSD is back at 1.3000, today's price action should tell us the answer. We are wary of a possible move lower again here #FX ^FR https://t.co/v16tyeDaUBNow that #GBPUSD is back at 1.3000, today's price action should tell us the answer. We are wary of a possible move lower again here #FX ^FR https://t.co/v16tyeDaUB
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The CBI survey is an encouraging sign, says economist Howard Archer at IHS Markit:The CBI survey is an encouraging sign, says economist Howard Archer at IHS Markit:
[It] fuels hopes that the UK economy is on course for some pick-up in growth in the second quarter after GDP expansion more than halved to 0.3% quarter-on-quarter in the first quarter. Hopes of improved second quarter growth got a significant boost from retail sales picking up markedly in April, although they were helped by warmer weather and serious concerns remain over the squeeze on consumer purchasing power.[It] fuels hopes that the UK economy is on course for some pick-up in growth in the second quarter after GDP expansion more than halved to 0.3% quarter-on-quarter in the first quarter. Hopes of improved second quarter growth got a significant boost from retail sales picking up markedly in April, although they were helped by warmer weather and serious concerns remain over the squeeze on consumer purchasing power.
It needs to be borne in mind that manufacturing output only accounts for 10.3% of UK GDP and that surveys on the sector have recently tended to be stronger than the hard data.It needs to be borne in mind that manufacturing output only accounts for 10.3% of UK GDP and that surveys on the sector have recently tended to be stronger than the hard data.
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UK factory orders at highest level since February 2015 - CBIUK factory orders at highest level since February 2015 - CBI
Back in the UK, and some positive economic news.Back in the UK, and some positive economic news.
Factory orders are growing at their fastest rate since February 2015, according to the latest industrial trends survey from the Confederation of British Industry. The order book balance for May came rose to +9 from +4 in April, compared to expectations of a flat reading.Factory orders are growing at their fastest rate since February 2015, according to the latest industrial trends survey from the Confederation of British Industry. The order book balance for May came rose to +9 from +4 in April, compared to expectations of a flat reading.
Factory output growth over the past three months rose to +28 from +22, the highest since December 2013. The weak pound and a recovering global economy are lifting manufacturers at a time when consumer spending is coming under pressure.Factory output growth over the past three months rose to +28 from +22, the highest since December 2013. The weak pound and a recovering global economy are lifting manufacturers at a time when consumer spending is coming under pressure.
Output volumes grow at the fastest pace since December 2013. #CBI_ITS #UKmfg https://t.co/avzHu4YDuq pic.twitter.com/RhRkqW6wtfOutput volumes grow at the fastest pace since December 2013. #CBI_ITS #UKmfg https://t.co/avzHu4YDuq pic.twitter.com/RhRkqW6wtf
But there are continuing worries about rising costs, and weak productivity. Rain Newton-Smith, CBI chief economist, said:But there are continuing worries about rising costs, and weak productivity. Rain Newton-Smith, CBI chief economist, said:
The summer sun has come out early for Britain’s manufacturers. Robust demand at both home and abroad is reflected in strong order books, and output is picking up the pace.The summer sun has come out early for Britain’s manufacturers. Robust demand at both home and abroad is reflected in strong order books, and output is picking up the pace.
On the other side of the coin though, we have mounting cost pressures and expectations for factory-gate price rises are running high.On the other side of the coin though, we have mounting cost pressures and expectations for factory-gate price rises are running high.
Boosting productivity is key to alleviating some of the cost pressures that manufacturers are facing. Sustained investment in innovation and education will be vital to shore up the success of British industry.Boosting productivity is key to alleviating some of the cost pressures that manufacturers are facing. Sustained investment in innovation and education will be vital to shore up the success of British industry.
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Helena SmithHelena Smith
The media this morning is of the view that time is very much of the essence if emergency bailout funds are to be disbursed before Greece’s €7.5bn debt repayment matures in July, reports our correspondent Helena Smith:The media this morning is of the view that time is very much of the essence if emergency bailout funds are to be disbursed before Greece’s €7.5bn debt repayment matures in July, reports our correspondent Helena Smith:
While issuing a statement saying the ball is now in the creditors’ court, the Greek prime minister Alexis Tsipras has also attempted to soften the blow of measures his government would never normally endorse by shifting the narrative to the issue of debt.While issuing a statement saying the ball is now in the creditors’ court, the Greek prime minister Alexis Tsipras has also attempted to soften the blow of measures his government would never normally endorse by shifting the narrative to the issue of debt.
Ahead of the vote, the leftist leader enthused that soon he could be “forced to wear a tie”.Ahead of the vote, the leftist leader enthused that soon he could be “forced to wear a tie”.
“The news is so positive that we are having difficulty believing it,” he told parliamentary reporters adding that the German chancellor Angela Merkel had waded in personally saying she would deal with the debt issue.“The news is so positive that we are having difficulty believing it,” he told parliamentary reporters adding that the German chancellor Angela Merkel had waded in personally saying she would deal with the debt issue.
The once fiery anti-austerian has long said he will only wear a tie once the Greek debt problem is solved with substantial debt relief. If Athens is able to write down a debt load now hovering around 180% of GDP – the equivalent of the GDP of South Africa – the government hopes Greece will then be included in the ECB’s quantitative easing program, thus opening the way to the country once again tapping international markets. Athens’ dependency on international loans has only exacerbated the debt load.The once fiery anti-austerian has long said he will only wear a tie once the Greek debt problem is solved with substantial debt relief. If Athens is able to write down a debt load now hovering around 180% of GDP – the equivalent of the GDP of South Africa – the government hopes Greece will then be included in the ECB’s quantitative easing program, thus opening the way to the country once again tapping international markets. Athens’ dependency on international loans has only exacerbated the debt load.
The German media this morning, in extensive coverage of the latest cost-cutting measures Greece has legislated, describes debt relief as the ace up Tsipras’ sleeve. With the systematic passage of policies his Syriza party once vociferously vowed to expunge, the popularity of the leftist-led government has plunged dramatically with the centre-right main opposition New Democracy party leading by 10 % in the latest Prorata opinion poll commissioned by the leftist Syntaktwn newspaper.The German media this morning, in extensive coverage of the latest cost-cutting measures Greece has legislated, describes debt relief as the ace up Tsipras’ sleeve. With the systematic passage of policies his Syriza party once vociferously vowed to expunge, the popularity of the leftist-led government has plunged dramatically with the centre-right main opposition New Democracy party leading by 10 % in the latest Prorata opinion poll commissioned by the leftist Syntaktwn newspaper.
During the often boisterous debate that preceded Thursday’s late night vote Tsipras insisted that the controversial pension cuts and tax reforms MPs were being called to support would not be implemented if debt relief was not forthcoming.During the often boisterous debate that preceded Thursday’s late night vote Tsipras insisted that the controversial pension cuts and tax reforms MPs were being called to support would not be implemented if debt relief was not forthcoming.
Senior European officials are quoted this morning as saying they are now in a race against the clock. Speculation of a comprehensive deal being deferred to June 15 when the eurogroup next meets would, they say, be too late for the process of having emergency bailout funds ratified by European governments and disbursed in time for the €7.5bn debt repayment in July. Everything will depend on the International Monetary Fund being brought on board and with ongoing disagreement over the ability of Greece’s economy to grow - vital to calculating debt relief - that is far from sure.Senior European officials are quoted this morning as saying they are now in a race against the clock. Speculation of a comprehensive deal being deferred to June 15 when the eurogroup next meets would, they say, be too late for the process of having emergency bailout funds ratified by European governments and disbursed in time for the €7.5bn debt repayment in July. Everything will depend on the International Monetary Fund being brought on board and with ongoing disagreement over the ability of Greece’s economy to grow - vital to calculating debt relief - that is far from sure.
The Washington-based organization has said repeatedly that without Greece’s debt being made sustainable, it will not sign up to the bailout. If that happens European officials say there will be no tranche for Greece. “It may be a difficult night,” Tsipras said referring to Monday’s eurogroup meeting.The Washington-based organization has said repeatedly that without Greece’s debt being made sustainable, it will not sign up to the bailout. If that happens European officials say there will be no tranche for Greece. “It may be a difficult night,” Tsipras said referring to Monday’s eurogroup meeting.
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Here’s a downbeat assessment of Greece and the eurozone from Swissquote Bank’s Yann Quelenn, despite the country’s parliament approving the latest austerity measures:Here’s a downbeat assessment of Greece and the eurozone from Swissquote Bank’s Yann Quelenn, despite the country’s parliament approving the latest austerity measures:
It has been a while since Greece was at the top of the market news. We consider this is as a key issue for the European Union so we are still monitoring the country. It is now back into recession (printing two consecutive growth negative quarters) despite the massive austerity policies over the last few yearsIt has been a while since Greece was at the top of the market news. We consider this is as a key issue for the European Union so we are still monitoring the country. It is now back into recession (printing two consecutive growth negative quarters) despite the massive austerity policies over the last few years
Pension cuts or the increase in taxes do not seem to be sufficient and the cost of servicing the debt is way too massive so we do not see any positive issue on that. Greece cannot devalue its currency and so it is then forced to devalue internally, for instance its public aid (pensions in particular).Pension cuts or the increase in taxes do not seem to be sufficient and the cost of servicing the debt is way too massive so we do not see any positive issue on that. Greece cannot devalue its currency and so it is then forced to devalue internally, for instance its public aid (pensions in particular).
Since February 2015, Greece has repaid €35.4 billion and by the end of 2018 Greece must repay €28 billion (including €2.7 billion of interest). To put that into perspective, the 2016 nominal GDP was €176 billion. The economy must then expand by at least more than 1.5% next year. And next year repayments are less than half of what Greece will need to pay in 2019.Since February 2015, Greece has repaid €35.4 billion and by the end of 2018 Greece must repay €28 billion (including €2.7 billion of interest). To put that into perspective, the 2016 nominal GDP was €176 billion. The economy must then expand by at least more than 1.5% next year. And next year repayments are less than half of what Greece will need to pay in 2019.
We don’t see how Greece will be able to reimburse this debt as it is clear that the country won’t be able to print a growth above the cost of servicing its debt.We don’t see how Greece will be able to reimburse this debt as it is clear that the country won’t be able to print a growth above the cost of servicing its debt.
In the short-term, everything looks decent on the single currency side but what will happen when Portugal or Spain have issues as deep as Greece. Uncertainties are far from over on the euro side.In the short-term, everything looks decent on the single currency side but what will happen when Portugal or Spain have issues as deep as Greece. Uncertainties are far from over on the euro side.
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Moody's keeps stable credit rating on PortugalMoody's keeps stable credit rating on Portugal
Good news - mainly - for Portugal.Good news - mainly - for Portugal.
Moody’s has kept the country’s credit rating at Ba1 with a stable outlook in its annual analysis. This reflects Portugal’s economic recovery and stronger labour market, countered with its very high government debt.Moody’s has kept the country’s credit rating at Ba1 with a stable outlook in its annual analysis. This reflects Portugal’s economic recovery and stronger labour market, countered with its very high government debt.
Evan Wohlmann, a Moody’s vice president and co-author of the report, said:Evan Wohlmann, a Moody’s vice president and co-author of the report, said:
Portugal’s credit profile is supported by the economic recovery, its return to private capital markets, the economy’s diversification and relatively high average wealth levels. Portugal’s key credit constraint relates to its very high government debt. Although we expect debt to start declining as a share of GDP this year, any debt reduction will only be gradual.Portugal’s credit profile is supported by the economic recovery, its return to private capital markets, the economy’s diversification and relatively high average wealth levels. Portugal’s key credit constraint relates to its very high government debt. Although we expect debt to start declining as a share of GDP this year, any debt reduction will only be gradual.
Moody’s highlights:Moody’s highlights:
Portugal’s gross public debt ratio remains one of the highest in the EU and the highest in the Ba1 space.Portugal’s gross public debt ratio remains one of the highest in the EU and the highest in the Ba1 space.
Debt-to-GDP ratio will gradually decline, supported by an average primary surplus of 2.3% over the next two years and a moderate nominal GDP growth, but will still remain around 125% of GDP in 2020.Debt-to-GDP ratio will gradually decline, supported by an average primary surplus of 2.3% over the next two years and a moderate nominal GDP growth, but will still remain around 125% of GDP in 2020.
After improving to 1.8% of GDP in 2017, Portugal’s general government deficit will deteriorate slightly in 2018 to 2.0% of GDP, compared to a deficit of 1.0% next year forecast by the Portuguese authorities given the rating agency’s assumption of more moderate growth and a stronger increase in expenditure. However, the deficit will remain below the 3% Maastricht threshold set by the European Commission.After improving to 1.8% of GDP in 2017, Portugal’s general government deficit will deteriorate slightly in 2018 to 2.0% of GDP, compared to a deficit of 1.0% next year forecast by the Portuguese authorities given the rating agency’s assumption of more moderate growth and a stronger increase in expenditure. However, the deficit will remain below the 3% Maastricht threshold set by the European Commission.
We expect Portugal’s economic recovery to continue, with an increase in GDP growth to 1.7% in 2017, before moderating to 1.4% in 2018.We expect Portugal’s economic recovery to continue, with an increase in GDP growth to 1.7% in 2017, before moderating to 1.4% in 2018.
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Over in Greece, the Athens market has greeted the news of the austerity vote positively. It is currently up 0.67% at 787.53.Over in Greece, the Athens market has greeted the news of the austerity vote positively. It is currently up 0.67% at 787.53.
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Oil boosted by production cut hopesOil boosted by production cut hopes
Oil prices are rising ahead of a meeting of Opec producers next week, as hopes grow that a production cut agreed in November could be extended by nine months to March 2018.Oil prices are rising ahead of a meeting of Opec producers next week, as hopes grow that a production cut agreed in November could be extended by nine months to March 2018.
Both Saudi Arabia and Russia, key producers, recently suggested such an extension was possible, pledging to do “whatever it takes” to tackle a supply glut. Even though US shale producers are taking up some of the slack from output cuts elsewhere, the prospect of such an extension is supporting crude prices.Both Saudi Arabia and Russia, key producers, recently suggested such an extension was possible, pledging to do “whatever it takes” to tackle a supply glut. Even though US shale producers are taking up some of the slack from output cuts elsewhere, the prospect of such an extension is supporting crude prices.
Brent is currently up 1.2% at $53.16 a barrel while West Texas Intermediate - the US benchmark - is up a similar amount at around $50. Ipek Ozkardeskaya, senior market analyst at London Capital Group, said:Brent is currently up 1.2% at $53.16 a barrel while West Texas Intermediate - the US benchmark - is up a similar amount at around $50. Ipek Ozkardeskaya, senior market analyst at London Capital Group, said:
Markets currently price in a nine-month extension in OPEC/Russia production cuts and the $50 level has been a reasonable target for those who took the oil recovery bet. [An] additional rise toward the $53/$55 is expected to be bumpier as it would certainly require deeper output cuts and/or any positive surprise at the May 25 meeting.Markets currently price in a nine-month extension in OPEC/Russia production cuts and the $50 level has been a reasonable target for those who took the oil recovery bet. [An] additional rise toward the $53/$55 is expected to be bumpier as it would certainly require deeper output cuts and/or any positive surprise at the May 25 meeting.
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As the markets end the week on a slightly more positive note, David Morrison, senior market strategist at Spreadco, said:As the markets end the week on a slightly more positive note, David Morrison, senior market strategist at Spreadco, said:
There’s a general feeling of relief that the US-led sell-off didn’t accelerate last night. Instead, all the major US stock indices managed to post modest gains despite earlier weakness. It may be too soon to sound the all-clear but so far investors are doing exactly what they’ve done for the past eight years: using any significant pull-back in equity markets as a buying opportunity.There’s a general feeling of relief that the US-led sell-off didn’t accelerate last night. Instead, all the major US stock indices managed to post modest gains despite earlier weakness. It may be too soon to sound the all-clear but so far investors are doing exactly what they’ve done for the past eight years: using any significant pull-back in equity markets as a buying opportunity.
But what will be of interest is to see if this bounce-back has the strength and conviction to push the indices back up towards or beyond recent record highs. Most of the trading gaps which formed after the first round of the French presidential election have now been filled.But what will be of interest is to see if this bounce-back has the strength and conviction to push the indices back up towards or beyond recent record highs. Most of the trading gaps which formed after the first round of the French presidential election have now been filled.
So technically there’s every chance of a resumption of a US-led stock market rally. In the near-term much depends on what comes out of Washington. But for now most investors will be happy to go into the weekend with another positive session for the major indices.So technically there’s every chance of a resumption of a US-led stock market rally. In the near-term much depends on what comes out of Washington. But for now most investors will be happy to go into the weekend with another positive session for the major indices.
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European markets move ahead in early tradingEuropean markets move ahead in early trading
With the overnight recovery on Wall Street after Wednesday’s slump and a relatively positive performance in Asia - the Nikkei 225 ended up 0.19% - European markets are also making a positive start to trading.With the overnight recovery on Wall Street after Wednesday’s slump and a relatively positive performance in Asia - the Nikkei 225 ended up 0.19% - European markets are also making a positive start to trading.
The FTSE 100 is up 24 points or 0.33% although pharmaceutical group Hikma is down 6% after cutting its revenue forecasts following a delay to a US drug launch. This takes its total fall this week to 10% so far.The FTSE 100 is up 24 points or 0.33% although pharmaceutical group Hikma is down 6% after cutting its revenue forecasts following a delay to a US drug launch. This takes its total fall this week to 10% so far.
Elsewhere Germany’s Dax opened up 0.1% while France’s Cac climbed 0.2%.Elsewhere Germany’s Dax opened up 0.1% while France’s Cac climbed 0.2%.
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Pound edges higher but remains below $1.30Pound edges higher but remains below $1.30
The pound rose above $1.30 on Thursday for the first time since September, but it did not manage to hold that level. Konstantinos Anthis at ADS Securities said:The pound rose above $1.30 on Thursday for the first time since September, but it did not manage to hold that level. Konstantinos Anthis at ADS Securities said:
The pound has had a turbulent 24 hours. A rally through the 1.3000 level yesterday took it to 1.3050 but a few hours later it collapsed to 1.2900 and ended the day around 50 pips higher. The mini flash crash was not related to any particular data set, so the drop was probably down to a combinations of factors. Sterling has risen around 7.5% in value over the past 30 days so the drop may have been traders taking money off the table, or it could have been down to the launch of the Conservative manifesto and the words of Theresa May.The pound has had a turbulent 24 hours. A rally through the 1.3000 level yesterday took it to 1.3050 but a few hours later it collapsed to 1.2900 and ended the day around 50 pips higher. The mini flash crash was not related to any particular data set, so the drop was probably down to a combinations of factors. Sterling has risen around 7.5% in value over the past 30 days so the drop may have been traders taking money off the table, or it could have been down to the launch of the Conservative manifesto and the words of Theresa May.
It is currently up 0.12% at $1.2953, while against the euro it is down 0.09% at €1.1641.It is currently up 0.12% at $1.2953, while against the euro it is down 0.09% at €1.1641.
Speaking of the manifesto, Citigroup analysts said it showed that the Conservatives showed no signs of moving to a “Singapore-upon-Thames’ model of a deregulated, low tax economy.Speaking of the manifesto, Citigroup analysts said it showed that the Conservatives showed no signs of moving to a “Singapore-upon-Thames’ model of a deregulated, low tax economy.
The bank said her bet on an early election should pay off, but rather hedged its bets in terms of a possible Tory majority, saying it could be anything between 104 and 190 seats.The bank said her bet on an early election should pay off, but rather hedged its bets in terms of a possible Tory majority, saying it could be anything between 104 and 190 seats.
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Agenda: Greek MPs back more austerity, markets set to recoverAgenda: Greek MPs back more austerity, markets set to recover
Good morning and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.Good morning and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.
Greece’s parliament has agreed to the latest austerity measures demanded by its creditors to unlock the next tranche of financial aid.Greece’s parliament has agreed to the latest austerity measures demanded by its creditors to unlock the next tranche of financial aid.
But the proposed cuts to pensions and tax hikes drew angry protestors outside parliament as the vote took place. Some hurled petrol bombs and firecrackers at police, who in turn released tear gas.But the proposed cuts to pensions and tax hikes drew angry protestors outside parliament as the vote took place. Some hurled petrol bombs and firecrackers at police, who in turn released tear gas.
Now the measures have been approved, the left-led Syriza government now hopes that European finance ministers will agree at a meeting on Monday to release €7.5bn of bailout funds, as well as looking at granting debt relief which will allow the International Monetary Fund to participate in the bailout. More immediately, it needs cash to repay a tranche of debt which is due in July.Now the measures have been approved, the left-led Syriza government now hopes that European finance ministers will agree at a meeting on Monday to release €7.5bn of bailout funds, as well as looking at granting debt relief which will allow the International Monetary Fund to participate in the bailout. More immediately, it needs cash to repay a tranche of debt which is due in July.
Prime minister Alexis Tsipras said (quote from Reuters):Prime minister Alexis Tsipras said (quote from Reuters):
We deserve and we expect from Monday’s eurogroup a decision regulating debt relief which will correspond to the sacrifices of the Greek people.We deserve and we expect from Monday’s eurogroup a decision regulating debt relief which will correspond to the sacrifices of the Greek people.
The country is still struggling, however, after seven years of crisis, with figures earlier this week showing it had gone back into recession.The country is still struggling, however, after seven years of crisis, with figures earlier this week showing it had gone back into recession.
Here is the agenda for Monday’s meeting as regards Greece:Here is the agenda for Monday’s meeting as regards Greece:
The Eurogroup will be informed about the preliminary agreement reached on 2 May between Greece and the institutions (the European Commission, the European Central Bank, the European Stability Mechanism and the International Monetary Fund) on a new set of policy reforms in the context of Greece’s economic adjustment programme, financed by the European Stability Mechanism.The Eurogroup will be informed about the preliminary agreement reached on 2 May between Greece and the institutions (the European Commission, the European Central Bank, the European Stability Mechanism and the International Monetary Fund) on a new set of policy reforms in the context of Greece’s economic adjustment programme, financed by the European Stability Mechanism.
The agreement is one of the steps towards completing the ongoing second review of the programme and paving the way for the next disbursement of financial assistance to Greece by the European Stability Mechanism.The agreement is one of the steps towards completing the ongoing second review of the programme and paving the way for the next disbursement of financial assistance to Greece by the European Stability Mechanism.
The Eurogroup will also discuss Greece’s medium-term (from 2018 onwards) fiscal targets and the issues related to the sustainability of the country’s public debt.The Eurogroup will also discuss Greece’s medium-term (from 2018 onwards) fiscal targets and the issues related to the sustainability of the country’s public debt.
Elsewhere, after Wednesday’s plunge on Wall Street following the latest accusations against President Trump, US shares managed to regain some ground, with the Dow Jones Industrial Average up 0.2%. The recovery was too late to help European markets however, which ended the day in the red. Analysts expect a more positive start to trading today.Elsewhere, after Wednesday’s plunge on Wall Street following the latest accusations against President Trump, US shares managed to regain some ground, with the Dow Jones Industrial Average up 0.2%. The recovery was too late to help European markets however, which ended the day in the red. Analysts expect a more positive start to trading today.
Our European opening calls:$FTSE 7462 +0.34%$DAX 12607 +0.13%$CAC 5301 +0.21%$IBEX 10705 +0.19%$MIB 21341 +0.20%Our European opening calls:$FTSE 7462 +0.34%$DAX 12607 +0.13%$CAC 5301 +0.21%$IBEX 10705 +0.19%$MIB 21341 +0.20%
But David Madden, market analyst at CMC Markets UK said there was still a fairly large amount of fear in the markets:But David Madden, market analyst at CMC Markets UK said there was still a fairly large amount of fear in the markets:
Buying the dip works well when the economic and political outlook appears to be positive, but given the uncertainty that surrounds Donald Trump you can see why we have only seen a small drop in the VIX. The scandal in Washington DC hasn’t gone away and neither has trader’s nerves. Going long too soon could prove to be costly.Buying the dip works well when the economic and political outlook appears to be positive, but given the uncertainty that surrounds Donald Trump you can see why we have only seen a small drop in the VIX. The scandal in Washington DC hasn’t gone away and neither has trader’s nerves. Going long too soon could prove to be costly.
A political scandal of this scale is going to stay hanging over Mr Trump for some time, and even if nothing comes of it in the end, it’s going to be a long and drawn out process. Having this story lingering away will be enough to unsettle traders.A political scandal of this scale is going to stay hanging over Mr Trump for some time, and even if nothing comes of it in the end, it’s going to be a long and drawn out process. Having this story lingering away will be enough to unsettle traders.
As befits a Friday, as thoughts turn towards the weekend, the agenda is looking a little thin, but the CBI is due to release its latest industrial trends survey later this morning.As befits a Friday, as thoughts turn towards the weekend, the agenda is looking a little thin, but the CBI is due to release its latest industrial trends survey later this morning.