Daily Market Report - 29/01/2015

Yesterday Greece’s new leaders struck a note of defiance yesterday as they began to scrap measures that had been planned as conditions of the country’s bailout packages. The new government said it would reverse privatisation plans and re-hire some public sector workers. This sparked panic in Greek markets. The Athens stock market plunged by over 9%. The banking sector has seen a quarter of its value wiped out. Also Greek 10 year bonds rose to 10.34%.

Further compounding the panic  credit rating agency Standard and Poor’s has threatened to cut Greece’s credit rating. They revised the outlook on Greece’s B rating to credit watch negative, which is the first step before a formal downgrade. 

Slight goods news in the Eurozone is that Consumer confidence in Germany is rising. The report showed an increase from 9 to 9.3, indicating consumers in Germany are shrugging off issues in Greece.

Yesterday Mark Carney praised the ECB for the boldness of plans to buy hundreds of billions of Euro’s of government bonds to fight the combination of weak growth and falling prices. He also states that the Eurozone needs more public spending in its poorer areas. 

The Federal Open Market Committee struck a positive tone yesterday. Janet Yellen said yesterday that US economy was expanding at a solid pace with strong job gains in a signal that the central should look to increase interest rates later this year. The Fed stated it would be patient in deciding when to raise interest rates, acknowledging a decline in inflation  due to record low oil prices.

Key Announcements:
EUR - 10:00 : Eurozone Consumer Confidence (Jan) expected to rise from -12 to -8.5
EUR - 13:00 : German Inflation (Jan) expected to fall to -0.1% from 0.2%
USD - 13:30 : Initial jobless claims expected to fall to 300K from 307K

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