The sharp sell-off across the European equity markets continues as investors remain cautious regarding Greece’s economic prospects. The latest talks between the Greek government and its lenders failed to reach an agreement, causing high volatility and nervous trading conditions across the global equity markets. In Europe, the CAC, DAX, IBEX and London equity benchmark indices retreated between 0.2% and 0.55%, while the Athens Stock Exchange index plunged for fourth consecutive session after falling over 3% to retest 680.00.
The big surprise comes from the European currency as EURUSD has been relatively unaffected by increasing Greek tensions. The Euro has held above 1.12 against the USD for over a week.
On the macroeconomic front, the Eurozone’s construction output rose modestly by 0.3% m/m in April compared to a 0.8% rise in March. In the UK, the ILO unemployment rate remained unchanged at 5.5% in April, as expected. All eyes are on the FOMC rate decision this afternoon, which could provide further insight into US economic conditions.
The focus will then turn to the Eurogroup meeting tomorrow in Brussels as investors await any clarification regarding the Greek debt issues.