Risk based markets pushed higher in early week trading on the back off the favoured New Democracy party winning the Greek election. However, any bulls in the market were quickly met with sellers after horrible US data, disappointing comments from Fed Chairman Ben Bernanke, Spanish yields still at record levels and talk of a Eurobond. Comments from Bernanke stating the weaknesses in the global economy and growth fuelled a breakout from an otherwise range based, direction-less market. The downgrade of several major UK banks by Moody's did not help risk sentiment as investors flock to the safe haven US Dollar.
Eurozone leaders are meeting for a summit in Rome to discuss the struggling single-currency, the Euro. Any Greek action will take a while to implement and all eyes will be on what the leaders agree going forward. The Spanish situation is one to watch as yields reach unsustainable levels. Real money-managers may start banking profits as we come to quarter end but these rallies may be short lived. The Yen typically moves at quarter end due to repatriation of funds. It is important to follow price action as a leading indicator in such mixed economic data.
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