Just how negative the prevailing sentiment for stocks is, became obvious yesterday as much better economic data out of Germany and the US had no or only little effect, managing at best to delay but not to prevent a further sell off in stocks

For today stock markets are expected to remain under pressure as uncertainty about Greece and the effects a potential exit out of the Euro would have on Europe, global economies and the financial system in general is driving investors out of stocks into safe havens like the German Bunds. However some temporary relief might come from Greek parties agreeing on a new election date today. Once the date is set it will be up to the individual pro-bailout parties to convince the electorate that the election is more or less about Greece remaining in the Euro, and that rejecting austerity measures will make this an almost impossible task to fulfil.

Also as Spanish bond yields are getting ever closer to the 7% mark again, traders will be looking out for early indications that the ECB might be resuming buying periphery bonds in the not so distant future. Tomorrow’s Spanish bond auctions will be a key test in regard to just how risk averse investors have become over the past few weeks.

Markus Huber - Head of German HNW Trading - ETX Capital
www.etxcapital.com