Spread Bettors Should ‘Tread Softly’ on Eurozone Exposure

By mosesbet · Filed Under Market News Comments Off on Spread Bettors Should ‘Tread Softly’ on Eurozone Exposure 

Spread bettors who have heavy stakes invested in the Eurozone need to tread softly and act with caution in the coming months. Watching the markets and playing the waiting game instead of rushing into positions may save them from making disastrous decisions this year. This advice comes on the heels of the recent readjustment of the European Union’s growth projection for this year. The initial forecast has been lowered now.

Precautionary Statement gives Cause for Concern

In addition, the European Union has also issued a precautionary statement stating that the entire region could be moving into a phase of mild recession during the year 2012. Considering that last November, the Union had predicted a 0.5% growth for the year, this comes as bad news for those who have invested in Eurozone assets. Spread bettors who have not taken position yet can make good use of this prediction to position themselves accordingly.

As of now the Union believes that nations in the Euro currency zone will exhibit a drop of 0.3% in growth this year. This prediction has been made with a view to enabling affected countries to increase focus on austerity measures well in time.

Low Growth Projections from Italy and Spain Lead to the Revision

One of the main reasons for the revised forecast is that both Italy and Spain have reduced growth projections. Since these two large economies do influence the fate of the Eurozone quite significantly the 1.3% and 1% dip (respectively) do leave their impression. On the bright side, Ireland is expected to show some growth albeit quite minor. Ireland was also the recipient of international financial aid alongside Portugal and Greece.

Continuing Risks

Olli Rehn, European Commissioner for Economic and Monetary Affairs, stated that the risks do remain in these markets since prospects have worsened. However, there are some signs of stabilization that indicate that given time the markets will gain equilibrium. One emerging fact that may be considered a silver lining is that with Greece getting its bailout, other affected countries may be able to borrow at slightly more affordable costs.



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