European equities rally ahead of Greece's extension proposal

Wednesday, February 18, 2015

Greece confirmed today that it will ask the European leaders for a 6-month extension of its European loan agreement. Greek government spokesman Gabriel Sakkelarides reported today that the official request for loan extension will be sent to Euro-group on Thursday morning. European equity markets climbed higher on the news with the CAC, DAX, IBEX and the Italian benchmark index gaining between 0.4% and 1.6%. The London equity benchmark missed the uptrend and slid slightly lower falling marginally 0.2%.  

CAC Index rally higher

CAC Index (CAC 40 Index )  Daily  2015-02-18 16-14-35

On the macroeconomic front, US factory output rose 0.2% in January against analysts’ expectations of a 0.3% rise. Housing starts declined 2% in January against estimates of a -1.7% drop, while building permits fell unexpectedly 0.7% during the same period versus analysts’ estimates of a 0.9% rise. The USD index climbed higher trading around 94.3 against a basket of currencies, while the euro remained under pressure hovering around 1.135 amid ongoing uncertainty in Eurozone.   

EURUSD remains under pressure around 1.135

EURUSD Curncy (EUR-USD X-RATE)  2015-02-18 16-12-26

In addition, we received more optimistic news from the UK as ILO unemployment fell sharply to a reach a 6-year low at 5.7% in December. Sterling rallied towards 1.545 against the USD following the bullish employment UK data.   

GBPUSD climbs higher towards 1.545

GBPUSD Curncy (GBP-USD X-RATE)   2015-02-18 16-12-06

Crude oil prices extended declines with Brent falling towards $61 per barrel and WTI front month futures retreating below $53 per barrel amid concerns regarding ongoing builds in crude oil inventories. 

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