Indices Spread Betting Markets Gain on Franco German Fiscal Accord
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For today's update see Spread Betting Daily.
The Daily Update from Anthony Grech, Research Analyst, IG Index.
Spread Betting 5 December 2011: 11.00am Update
The FTSE 100 started the week with decent gains, as optimism rose that a Franco-German summit later today points the way to further progress towards a Eurozone debt crisis solution.
By 10.45am (London time), the FTSE 100 had risen 0.52% to 5581.36, while the FTSE 250 had gained 0.76% to 10,386.14. Strong gains were also seen in European indices spread betting markets.
Eurozone hopes rise as France and Germany meet
And so yet another week dawns with Eurozone hopes running high. The leaders of France and Germany will meet today, in an effort to hammer out joint proposals to resolve the long-running debt crisis.
Debt markets will be hoping that Chancellor Merkel and President Sarkozy will be able to find a middle ground that reconciles their twin plans of implementing tighter fiscal control and a greater role for the ECB.
Other positive movements also appear to be helping sentiment to hold up this morning. Both Italy and Ireland have announced additional austerity measures (in Italy's case, they appear to be so severe as to cause welfare minister Elsa Fornero to break down in tears at a live press conference), reinforcing their determination to meet deficit reduction targets.
Even Belgium has seemingly pulled itself together at last and announced the formation of a coalition government, after 535 days without a government.
However, it is impossible to escape the worry that hopes will be dashed later this week. There has been much talk in the press of a German determination to impose a 'fiscal union' with full oversight of national budgets.
However, what Ms Merkel is actually pressing for is an enhanced version of the growth and stability pact that was set up before the formation of the euro. Several member states openly flouted this pact, and it is quite plausible that they will do so again.
In addition, Germany remains as opposed as ever to joint bond issuance by Eurozone countries, seeing this as a means for indebted nations to escape their obligations. If spread betting markets are disappointed once again, the result could be a nasty sell-off.
That said, politicians might finally get down to a real solution, which would set the stage for a pleasant December rally. This week could well be the point that will see either the breakup of the currency union, or its metamorphosis into a tighter political unit.
Growth slips at Michael Page
Recruitment firm Michael Page became the latest company to issue a profit warning this morning, sending the shares down 12% to 319.2p. The firm said that the Eurozone crisis and the weakening of economic growth in developed markets were having a major impact on its trading.
Growth in its Europe, Middle East and Africa division was down by 45%, a substantial change from the third quarter update, which looked forward to strong growth. Shares in the firm started the year at 555p, and have fallen 41% over the year so far. Fellow recruitment firms were also hit, with Hays and Robert Walters down 3%, and Staffline losing 6.4% to 190p.
US pre-market
At 3pm (London time), the ISM non-manufacturing index for November will be published, with factory orders for October released at the same time. The former is expected to show a modest improvement, while the latter is forecast to decline slightly.
Dow futures are currently up 95 points, with S&P 500 contracts up 12 points.
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The above comments do not constitute investment advice and neither IG Index nor SpreadBets.org.uk accept any responsibility for any use that may be made of them.
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"Indices Spread Betting Markets Gain on Franco German Fiscal Accord" last update by AG, 05-Dec-2011
Warning: Financial spread betting carries a high level of risk. You can lose more than your initial investment or stake. Financial spread betting may not be suitable for all investors. Only trade with money that you can afford to lose. Make sure you fully understand the risk involved. If necessary, seek independent financial advice.
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