The European markets finally seem to have an ounce of respite after a torturous year. The European markets have been facing a lot of problems since the Greek crisis last year. The European market was burdened with a high credit payment that was due their way by Greece. However, due to the insolvent status of the Greeks the problem was compounded by making the Greeks pay a higher amount of taxes for a longer duration of time. Additionally, the European markets had to bail out Greek businesses and financial institutions in order for the country’s economy to function.
The Greek tragedy
Ever since the Greek bail-out package many countries began to feel the intense ramifications of helping the island nation. The European market began to slide continuously for nearly a year without any form of reprieve in near sight. Additionally, the slump that came around in the Chinese economy added more turmoil to the already stumbling European markets. Once the Chinese markets defaulted with their economic markets, the European markets suffered as the Chinese began adopting more austere measures. This resulted to the Chinese reducing their rate of imports which directly and intensely affected the European markets.
Last month however, the European Central bank hinted at a potential stimulus package that aimed at quantitative easing as a monetary policy. The European Central Bank hinted at potential interest rate cuts which encouraged the weak and meagre European markets. This was a highly demanded move by the traders and market investors. The move made by the European Central Bank to do so was finalized late last week, which has boosted the market and its potential by a substantial amount. The quantitative easing policy seems to have brought some respite for the European market. The stock prices for the European market index grew almost simultaneously and as much as the Asian markets, which was a good sign and much needed relief for the European market.
The oil market
On the other had the sanctions that were lifted off Iran by the United States of America and the United Nations have finally come to fruition. However, the results weren’t as fortuitous as expected. After Iran has been allowed to trade their oil on the open market there has been a glut in the market which has pushed oil prices down after its transient rise last week. This has turned people’s attention towards the Bank of Japan, the Bank of England and The US Federal Reserve.