Deal or no Deal - Greek concerns weigh on global markets

Thursday, June 25, 2015

Deal or no deal? International creditors yesterday rejected another Greek proposal as the meeting of European Finance ministers ended without an agreement on Wednesday evening. Discussions are set to continue this morning. According to Bloomberg, along with Tsipras discussions with IMF Chief Christine Lagarde, European Central Bank President Mario Draghi and European Commission President Jean-Claude Juncker, European Finance Ministers are also in Brussels trying to find a way to reach a deal that will satisfy all sides. Furthermore, as Greek Prime Minister Alexis Tsipras embarks on a last-minute effort to reach an agreement on a reform deal with creditors, a rebellion is escalating in Greece among his own Syriza party and the opposition.

It looks like Greece’s debt issues will continue dominating global markets today. The euro has slightly rebounded this morning to retest 1.12 against the USD, however, European equity markets continue to remain under heavy pressure. The CAC, DAX, IBEX and London equity benchmark indices retreated between 0.30% and 0.60% in early trade today. German GfK consumer confidence dropped slightly to 10.1 in July compared to 10.2 in June, missing analysts’ expectations.

EURUSD rebounds above 1.12

EUR Curncy (Euro Spot )  Daily 25 2015-06-25 09-05-26

On the macroeconomic front, market participants will be keeping an eye on the release of the US personal income and spending data as well as the PCE deflator, which is considered as an inflation measure watched by the US Fed. Investors will be watching weekly jobless claims, KC Fed and US Markit Composite PMI for June. The USD index has been hovering around 95.20 against a basket of currencies this morning, awaiting key US economic releases.  

Asian equity markets reversed recent gains and slid lower overnight. The Hang Seng index retreated over 220 points (-0.85%) towards 27,150, while the Nikkei index dropped 0.46% to retest 20,770.  

The weekly EIA oil inventories report was very bullish after verifying a large decline of 4.93 million barrels in crude oil stocks for the week ending 19th June. The most significant part is that crude stocks at the key location of Cushing, Oklahoma, declined by 1.87 million barrels during the same period, suggesting a recovery of the US oil demand. However, gasoline and distillate inventories rose by 680K and 1.83 mln barrels, respectively. Crude oil prices rebounded and edged higher this morning as Brent front month futures climbed towards $64 per barrel.

WTI front month futures

CLQ5 Comdty (WTI CRUDE FUTURE  A 2015-06-25 09-11-21

 

Events for today:

0700

DE

May

GfK Consumer Sentiment

1330

US

May

Personal spending

1330

US

w/e

Jobless Claims

1445

US

Jun

Markit Composite PMI

1530

US

w/e

EIA Nat Gas

1600

US

Jun

KC Fed

 

All times UK Local Time

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