Mike McCudden, Head of Derivatives at Interactive Investor (www.iii.co.uk), gives his thoughts on the last week of trading and looks ahead to what we can expect next week.
"At time of writing the FTSE is sitting around 5670 with the next level of identifiable support expected to be around 5650 level. Traders hoping to fill their boots at these lower levels will be applying more caution than usual as all the economic concerns banded around in recent months appear to be coming to pass. Any bounce from here should be a dead cat unless we see some form of resolution on the table for Greece in the short term.
"The US Dollar, an apparent safe haven in troubled times, has been on the rise as traders wake up to all the potential nightmare scenarios as Greece goes into meltdown. Commodities, the dominant force in equity markets of late, have been falling on the back of dollar strength taking the indices with them. But there are no economic figures coming out of the US to give us any glimmer of hope going forwards. Naturally investors are running a mile from the banks exposed to the Greek debt and the domino effect that could potentially bring.
"In the UK, if you throw high inflation, stagnating wage growth, fears over rising unemployment, a flat housing market and high levels of personal debt into the economic pot there is no great surprise in getting the biggest monthly fall in UK retail sales for over a year. Don't expect the situation to get better any time soon as both Tesco and Sainsbury's offer dreary outlooks going forward.
"All in all not a good week to be in the markets, unless you were short and don't expect there to be a theme change any time soon. Next week investors will take their eyes off Greece briefly to look to US housing data and will hear what Bernanke has to say as he speaks at the Fed Press Conference on Wednesday. We will also see minutes from the MPC minutes on Wednesday, but expect that to be a side show."
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