Europe Higher as Mansion House Looms, Greece Uncertainty Continues

European markets are looking positive as we approach midday, however all eyes are focused on BoE governor Mark Carney who later this evening will deliver a speech at Mansion House. Greece, of course,  is the other topic of conversation as yet another meeting between France, German and Greece has many ready to believe that we could be close to a deal on Greek debt.

european union flags

Adding more fuel to the fire over the Eurozone issue, German bond yields hit the psychological 1% mark this morning for the first time since September, as a result of the talks due to go ahead today. Overnight the major indices on Wall Street fell into negative territory for the year.

We all get what is being called Greek fatigue at the moment, but the problem is that we cannot attribute any market move without looking to the news flow coming out of Athens.  The uncertainty is causing huge problems for our traders as it makes the decision making process on the next trade all the more difficult. The fact we have no idea whether the announcement of a deal is going to be announced at any minute, means that taking any position on anything with European exposure has an even bigger element of risk attached to it. Of course that’s not to say there isn’t a whole plethora of other instruments to trade on.

Alexis Tsipras has been trying to rally the rest of the Syriza party and get them on board of his cash for reforms deal that will help Athens avoid a (another) default at the end of the month.

The FTSE is currently in positive territory as the market awaits Governor Carney’s speech later tonight at Mansion House. The speech later this afternoon is expected to see Mark Carney announce a new body that will oversee the Financial Markets and promote industry standards. The City body thought up by Chancellor George Osborne is to help deal with the likes of abuse that has rocked some of the major financial institutions in this country. Scandals like the foreign exchange and Libor fixing have caused massive reputational damage to the industry and the UK as a hub for financial business.

Earlier this morning UK industrial production reading came out with a mixed bag of numbers, however there seemed to be no adverse effect to the major indices. Later this afternoon we will be looking towards another relatively quiet economic calendar despite the release of the crude oil inventories and the federal budget report.

Chart of the day

Today’s chart of the day is USDJPY after last night saw the head of the BoJ Kuroda dropped huge hints that the Yen shouldn’t weaken much further against the US dollar.

USDJPY chart 10 jun 2015

Mr Kuroda said that Japan’s real effective exchange rate was “very weak, so further declines do not seem likely.” The comment sparked a 1.4% rally in the Yen against the US dollar.