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    Greece focused on Russia | Super mergers are back

    The sell off from the U.S. Market is filtering into the European markets this morning. The economic data released this morning for Germany has made investors a little more cautious after the German manufacturing orders dropped by 0.9% as compared to the previous month. Not a good news if you are trading euro, because Germany is considered as the economic engine of the eurozone and despite the fact that the PMI data released yesterday was promising, but today’s factory orders data is going to keep the pressure on the euro.

    Although, the most important event for the day is the visit of the Greek prime minister, Tsipras, to Russia along with the FOMC minutes which are due later this evening however, what really important is if Greece will be able to fulfil its promise tomorrow and repay its loan repayment to the IMF. The Greek prime minister’s visit to Russia is a real threat of Greece relations to other Eurozone officials, and given that the EU officials have supported the tight sanctions against Russia, it is no brainer if Russia does not try its best to create it new friend in the eurozone. The fact is Greece really need help and if that help is in the form of Russian loans, I will highly doubt they will refuse it.

    The FOMC minutes are due later this evening and the market focus will be towards the tone of these minutes- when the rate hike will be coming and if the recent weakness in the job market has stirred any feelings among the policy makers. A dovish tone, could take some more wind out of the dollar rally however, if the Fed believe that they are still confident in raising the interest rate, then yes, it could stimulate more capital on the long side for the dollar.

    Super mergers are back and finally you can see big M&A deals taking place in the energy sectors. This morning Shell has agreed to buy the BG group in order to increase their market share. The merger is going to the have biggest positive impact in its gas production and the company will be able to compete better with big US giants. This kind of merger was inevitable given how the price oil has fallen and there will be no surprise if we see this trend to pick up more fuel in the coming days. Till this day we have no signs of fall in production of oil in the US and Saudis are still determined to keep their level of output unchanged. As long as this grid lock stay in place and we do not see the demand side balancing the supply, the price of oil has very limited upside. This is going to keep the pressure on bigger energy firms which some by choice or other by force will be pushed in the arena of M&A.


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