Stock Markets Still Volatile

Euro

Initial indications are that traders remain unconvinced by the latest statements on Euro debt.

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The initial reaction of markets to statements by politicians over the weekend was a fall, a rally, and a very modest rise of 1%, apparently propped up by much stronger bank stock values as bankers look forward to another round of taxpayers forced investment.

The question now is whether the markets will settle around a very slight improvement, or start to worsen at increasing speed as the week’s trading continues.

Past experience is not encouraging. Traders are becoming very cynical about political statements on Euro debt and the global economy. As a result, they are slow to rally and quick to sell down.

Some commentators were hoping to see rises of more than 4% as markets opened after the weekend. That was probably an unrealistic expectation after the serious loses of recent weeks.

Study of recent graphs suggest a 1% rally could be wiped out and followed by a severe fall.

Much will depend on evidence during the next few days that political words are honoured with political decisions and deeds.

 

Newsdesk

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