“Positions remain too far apart,” Merkel told reporters early today after the first session of a summit in Brussels. “Probably there will be no result at the end of this summit. There may be some progress but it is probable that we will need to meet again at a second stage.”
This sentence by the German Chancellor Angela Merkel reported by Bloomberg highlighted the division between rich and poor countries over the European Union’s next seven-year budget.
But markets seemed to not caring much the Stoxx50 fell just 0.08% to 2,533.18, while the German Dax rose 0.03% to 7,247.31. In Southern Europe Italian Ftsemib fell 0.16% to 15,529.32 while the Spanish Ibex dipped 0.35% to 7,848.
The reason: companies in Europe’s powerhouse economy have turned slightly more optimistic about the future, breaking a six month of worsening sentiment as measured by the IFO. German Ifo Business Climate Index rose 101.4 versus 99.5 expected and 100 at previous reading.
The euro climbed to $1.2913 following the data and is on track to gain 1.2 percent against the dollar this week. The greenback took a pause versus the Japanese yen falling 0.35% to 82.17$.
Commodity wise, Gold edged up 0.1 percent to $1,731.36 an ounce and looks set to post its second weekly rise in three, while three-month copper on the London Metal Exchange was up 0.18 percent a tonne at $7,729. On the other hand Brent crude slipped towards $110 a barrel as the fragile ceasefire between Israel and Gaza eased supply concerns.
But eyes today are all for Greece, as optimism mounted (although none doubted) that Greece will get the money to avoid bankruptcy on Monday as a Greek government official told Reuters the IMF and the European Union have narrowed their differences over the target for Greek debt reduction by 2020.
Greece debt target and how it can be reached is paramount in agreeing the release of 44 billion euros of funds from the bailout package Greece desperately needs to avoid bankruptcy.
All the market knows that for no reason Greece will not get the money, the problem is when, but let me ask a question: what’s more important having the money now, or not solving the problem once and for all? Think about it as another way to calculate the Time value of money.