Austerity or bust, the Greeks must decide

Chance of a Greek deal up in the air as creditors rebuttal points to negotiations going down to the wire.

UK markets

For every deadline that is reached, another is set as the Greek crisis rolls on for yet another day today. Despite the inability to pay its IMF bills on the second time of asking, discussions continue and the markets are left guessing as to what to expect next. True to form, today has seen more rumours and conjecture than hard facts, but the stance of Syriza is perceived to be softening as Alexis Tsipras realises that with every day that passes the chance of him having to leave office due to a 'yes' vote increases. The rule of calling a referendum is only to call one if you know you will win, but unfortunately this is no certainty for Mr Tsipras. Ultimately, the Greeks decided to vote for a party which fooled them into believing a solution without austerity existed in the eurozone. This weekend will give a chance to respond to the real question and that is whether eurozone austerity or a Drachma default is preferable. Unfortunately neither path seems easy.

Sirius Minerals was by far the greatest winner of the day, with shares rising over 57% off the back of the news that the North York Moors National Park Authority gave the go ahead to construct the world’s largest potash mine. The next major hurdle will be to finance the project, which at £1.7 billion, will be no mean feat for a firm currently holding £27 million in the kitty. Following years of shrivelling valuations and disappointing projects owing to the falling price of commodities, SXX has provided a positive beacon for UK small cap investors chasing the dream. Greene King has blamed the unwillingness of Scottish punters to drink-drive on its disappointing slowdown in sales. The clampdown on drink drivers is likely to remain an increasing trend that could spread throughout the UK and thus this may not just be a one-off for the firm. 

US markets

US markets are in a positive mood today, coming off the back of the highest ADP non-farm payrolls number this year. The US jobs markets has been improving substantially recently, following a winter-infused slowdown throughout the first-quarter. The feeling is that the worst is over and Fed officials are becoming more confident than ever of the notion that a September rate rise remains an option. With the Greeks seemingly on the brink of collapse, global sentiment is largely dictated by European affairs, yet with tomorrow’s US jobs report fast approaching the Fed rate rise picture will be back in the frame before long.

Today marked the first day for Jack Dorsey in his new role as Twitter CEO. The firm represents one of the largest social media networks by user base, yet also represents one of the least profitable; something which Mr Dorsey's predecessor and co-founder Dick Costolo is all too aware of. Ultimately, Jack Dorsey’s time in the hot seat will be brief, yet with the right person in place, the firm has what it takes to be one of the biggest stocks of the coming years.

Commodities

Crude oil inventories rose for the first time in nine weeks, pushing oil prices lower. The fact is that US oil stocks remain incredibly high by historical levels and the resumption of the build-up we have seen throughout 2014 means that despite driving season being upon us, supply is higher than demand at this price. For this reason, losses seen across crude markets this week are likely to persist and the strong US supply means that there is essentially a cap upon oil prices rising by any degree in 2015.

FX

The US dollar has come back to play today, with the likes of the euro, sterling and many other major currencies all suffering at the hands of the Greenback. With today’s ADP number strengthening the story for a good jobs report on Friday, the likeliness of a 2015 rate hike could push for further dollar gains tomorrow.