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Greece gives in to austerity

Published Monday, July 13th, 2015

Judging by the stock market performance last week the Greek credit/bailout/exit saga did not rack investors’ nerves as the stock markets, in general, held up reasonably well. Only the Russian and Japanese indices lost value over the week whilst US indices finished the week unchanged to slightly higher, the FTSE-100 index gained 1.33% and the German stock index finished 2.33% higher with the euro gaining 0.45% against the dollar. Investors of the Shanghai Composite Index seemingly have a great amount of faith in the government as they pushed the value of it up 5.18% higher on the week and 15% above the week’s low as Beijing continues in its attempts to boost liquidity after the 35% sell-off of the last four weeks.

The general optimism surrounding global equities indices last week faded over the weekend as marathon Greek debt talks provided little sign of a breakthrough in the impasse. Fraught negotiations which at one stage were described as violent lasted well into the early hours of this morning as European officials sought to avoid a market meltdown and remove lingering uncertainties that have done so much to scupper sentiment across the currency-bloc. Perennial efforts at bringing the crisis to an agreeable conclusion eventually paid off after this morning brought with it confirmation that a unanimous agreement on Greece’s proposed third bailout had been reached. The landmark deal will undoubtedly bring with it a much needed guarantee of ECB support to Greece’s embattled banks and puts a Grexit firmly off the cards for now.

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Posted by Tamas Varga

Tamas Varga has been in the oil industry since 1992 and with PVM for 18 years. During his time in the industry he has gathered a range of experience in the oil markets. At PVM Tamas is in charge of data collection and analysis.