Greek Havoc Returns As Europe Eyes U.S. Jobs

Greek Havoc Returns As Europe Eyes U.S. Jobs

European markets started the session on Friday with heightened volatility and renewed tension as Greek debt woes resurface as investors anticipate the infamous U.S. jobs report.

The squabble over austerity in Greece is again agonizing the market and overshadowing the signs of stability and optimism after Hurricane Sandy left less than anticipated damage and positive economic data from across major nations from China to the United States.

Greece this week returned center stage with the 2013 budget and fears that the nation might not be granted the November €31.2 billion tranche and be forced to bankruptcy as the government struggles to pass needed austerity measures by the EU and the IMF.

The parliament passed the privatization bill but Samaras faces more challenges to please lenders and to pass the €13.5 billion austerity package. The market is under pressure again after the Greek constitutional court ruled that the reform to the pension fund is unconstitutional reviving the political risks and fears that the coalition government might be again pushed into the heart of fire!

Investors are wary over the outlook and remain cautious. We have seen range trading in the past period which will dominate without any major change to the outlook. The resurfacing debt havoc in the euro area might be the needed power to tip the market again, but general we have seen consolidation around recent levels as the dollar holds grounds.

The U.S. jobs report and Greek woes captivate the market amid a tensed earnings season and mainly offset the focus today on revised European manufacturing figures.

The main data for the day remains the U.S. jobs report with the expected acceleration in job creation in October to the fastest pace in eight months after the ADP yesterday printed a positive picture for the data today.

More importance was given to the data today ahead of the November 06 election, as they might be Obama’s last bid to the presidency especially after the skeptic notion erupted following the unexpected drop in unemployment to 7.8% last month the lowest since Obama took office.

The jump again in unemployment rate today will underscore the drop last month and might trigger further unwinding of previous positive expectations, especially as it will base the ground for deteriorating numbers next month as the impact of Hurricane Sandy shows.

Volatility will dominate the session today with one eye on Greece and the other on the U.S. jobs report, but generally good jobs figures today might not be dollar magical today as much as sentiment magical and support the risk appetite, while even the slightest negative data will be of steep bearish impact on the market, stocks and commodities while power haven dollar and yen demand.