The main talking point in Europe was geared towards Greece, with Greek bonds rallying after the country’s prime minister promised to ease the country’s austerity burden to try and win votes. Antonis Samaras has promised to cut taxes, and minimise any wage and pension cuts, should he return to power after 25 January’s general election.
This is having an impact on the Euro as investors are uncertain on the outcome, and the speculation of Greece detaching itself from the Euro zone is also causing uncertainty. There are rumours that Greece will get another debt structuring deal, and avoid quitting the euro, but until something official is state , it will continue to cause unease.
It was a relatively quiet day also in the UK. The main topic is the supermarket wars. Britain’s big four supermarkets are all cutting the price of their fuel, meaning motorists will feel some benefit from the tumbling oil price. A garage in the Midlands city has become the first to charge less than £1 for a litre of petrol since around 2009. Asda, Morrisons, Sainsbury’s and Tesco have also been forced into dropping a further 2p off their petrol and diesel.
These lower prices on essential consumer goods will likely to lead to a lower inflation figure that is released today.
US markets have come under pressure recently after 2014’s record breaking run, with a sharp decline on Friday after the non-farm payroll figures gave a mixed picture of the economy. However Federal Reserve member Dennis Lockhart said the strength of the US economy meant the central bank would probably be justified in increasing interest rates by the middle of 2015.
He also suggested that the major risks would be outside the US, with weak global growth and the decline in oil prices complicating the outlook. He said low oil prices would ultimately benefit the US economy but at the moment they left the Fed with “considerable ambiguity” with achieving its inflation goals.
09:30- GBP : UK Consumer Price Index (Dec)
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