Global markets fluctuate on Greece's mixed messages

Thursday, July 02, 2015

“Greece fatigue” continues to dominate global equity and commodity markets as there is still no conclusion to the debt crisis. The Greek Prime Minister Alexis Tsipras accused international creditors of blackmailing Greek voters ahead of Sunday’s referendum, just hours after he accepted most of the terms of the newly proposed reform plan with a handful of minor changes. Thus, Eurozone leaders were confused by mixed messages yesterday and reported that negotiations will start again after the Greek referendum on Sunday 5th July. Pause for now…

The ECB’s governing council has not taken any decision yet regarding possible haircuts on Greek government bonds and government-backed bank debt, which major Greek banks use as collateral for their ELA programme. Please note that the cap on ELA (emergency liquidity assistance) remained frozen at the level of 89 bln euro.  

There is increasing euphoria across the global equity markets. Asian equities extended recent gains overnight as the Hang Seng index gained 0.42% towards 26,370 and the Nikkei index rallied nearly 200 points (+0.95%) above 20,520. This morning, European equities edged higher in early trade as the DAX, CAC, IBEX and London equity benchmark indices posted modest gains.

Following latest reports regarding Iran’s nuclear programme, Tehran has been finalising a contract system in order to secure $100 bln of new oil and gas deals with western diplomats if current sanctions are lifted, according to the Financial Times. Iranian executives are preparing for a visit from the Head of United Nations’ atomic agency regarding the ongoing nuclear programme negotiations. WTI front month futures retreated sharply over $2 yesterday to end the session at $56.96 per barrel.  

WTI front month futures decline towards $56

CLQ5 Comdty (WTI CRUDE FUTURE  A 2015-07-02 08-59-42

Today, the main focus will be on the release of the US employment data including the key non-farm payroll figures and weekly jobless claims. In addition, the release of ISM NY manufacturing and factory orders will draw investors’ attention. Market participants will be keeping an eye on how the US Fed reads the employment indicators as it considers them the key element for a possible US interest rate rise in the coming months.  

 

Events for today:

0700

UK

Jun

Nationwide House Prices

0930

UK

Jun

Markit CIPS Construction PMI

1000

EZ

May

PPI

1330

US

Jun

NF Payrolls & Unemployment

1330

US

w/e

Jobless Claims

1500

US

May

Factory Orders

1530

US

w/e

EIA Nat Gas

 

All times UK Local Time

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