EU and IMF due to start negotiations on emergency package for Greece
Disclaimer: THIS MATERIAL IS NOT INVESTMENT RESEARCH AS DEFINED BY THE FINANCIAL SERVICES AUTHORITY
A shock rise in the cost of living is potentially a cause for concern as it likely interest rate rises may take place sooner rather than later. High petrol prices pushed UK inflation from the key 3% percent mark to 3.4%. Sterling saw a small spike against the US dollar and retracing back to lower levels.
Against the Euro, Sterling continued its recent rally. The pound is currently trading at levels seen back in February after breaking above the high of 1.1484 this morning. The next significant target on the upside is the late January high of 1.1621.
A 20 member team from the EU and IMF is due to start their delayed negotiations today on activating the 45 billion Euro emergency package for Greece. Greek bonds are now trading over a 450 basis point spread to the German bunds. The Greek government needs to raise 10 billion in May to meet its commitments.
The Euro continues to carry a heavy weight, traders are trying to filter between the positive economic fundamental data and the concerns over macro fiscal debt issues. If the Euro is sold back above the 1.16 level against the pound, technically this will be a good indication of higher prices to come in the second half of the year.
Wednesday 21 April 2010, 12:03pm
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