Greece has now only 50% chances to stay in the European monetary union. The slap received yesterday from Germany led to the recalculation of the percentages. Greece requested an extension of the bailout program for 6 months starting from the 28th of February. The Hellenic proposal was rejected as it didn’t meet the EU’s requirements. Eventually, things got quiet as the ECB met yesterday to discuss emergency lending program and gave Greece a two-week extension to allow continued lending to Greek banks. In addition, German Buba President Weidmann assured the markets that the ECB is not considering capital controls, for now.
Market participants appear to maintain their optimism, even if the ECB is clearly at the helm of negotiations. The German DAX remains near the historical peaks while the euro makes a short trip to the 1.1350 support. Today is due to be published the PMI indexes for France, German, and the eurozone and if expectations will be met, the euro could go back to the 1.1400 resistance level.
ECB meeting minutes that led to the beginning of the first printing money program in the history of the institution are also historical and prove more transparency. It seems like a large majority supported the QE program which involves the printing of 60 billion EUR per month for 18 months or until inflation returns to the target of 2%.
The American dollar is not experiencing a flourishing period as it receives multiple negative news. After the falling PPI was published on Wednesday at -0.8%, the Capacity Utilization Rate fell to 79.4% and the Industrial Production decreased to 0.2%, the FOMC decided to act as dovish as possible within the pale of the FOMC Meeting Minutes. The majority was willing to wait for evidence of a return of inflation before moving to raise interest rates, while keeping an eye on the sources of serious global concern in Ukraine, China and Middle East. The dollar depreciated strongly against al its counterparts, but it looks like it will remain calm until Tuesday when markets will again be agitated by the ECB President Draghi speech and Fed Chair Yellen testifying.
Oil’s quotations are now being influenced not only by the weekly reports of the American inventories, but also impacted by the number of functional oil extraction platforms. Yesterday, crude oil inventories were reported up to 7.7 million barrels, and the price of WTI lowered to the $49.80 low, but it looks like the decline in the U.S. oil rig count continues and this is considered a clear sign of the pressure on oil producers. The WTI price rose to 52.50 dollars while Brent went to the 60.50 local high. Once these new resistance levels are surpassed, chances to see a new episode of increasing price rose considerably.
