The UK FTSE seems to be heading into the weekend with a reluctance to give back the gains of recent weeks. Aided by fresh announcements from Government and Central Banks that further "money printing", which may be as much as £140 billion is on the cards to reflate the UK economy, it was only a matter of time given the quantitative easing ( a fancy technical name for money printing) so far has failed to do the job. They have taken an overnight lead from the US, where expectations of further relaxing of the printing presses, the Bernanke asset bubble, seem to be more in the spotlight than fears of what may come after this weekend.
Fears?
Markets seem fairly relaxed considering that the Greeks go to the polls on Sunday and it looks like the result will be about as inconclusive as the last time. The markets will no doubt be hoping for a coalition to come out of the election in support of the bailout conditions previously set by the EU. The alternative is a step into the unknown, or at least an unknown that could either result in another market crash, or at least a fall that gives back all the gains of the last few weeks. It is reported that traders have been keeping their powder dry awaiting the election result from Greece. Pretty good advice right now.
Then there's the little matter of Spain touching the uncomfortable 7% interest on Government borrowing. The Germans are still very much against the proposed Eurobonds, which is basically just another QE type reflationary exercise that the markets would probably be happy to support. Given this backdrop the market seems to be in one of those play it by ear moods, the more positive approach of the last few weeks could be a distant memory by this time next week. Maybe the Greeks will surprise us? Actually, I suspect no surprise, no overall majority, more uncertainty, for both Greece and the markets.
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