Greece defaults on IMF payment

Wednesday, July 01, 2015

Greece’s last minute appeal to international creditors for financial aid yesterday got rejected. Thus, the country became the first developed economy to default on the IMF payment as the deadline expired yesterday. The IMF confirmed yesterday that the country has not made its scheduled 1.6 billion euro loan repayment to the fund, so economic conditions deteriorated. Furthermore, the Greek Prime Minister Alexis Tsipras made an extraordinary last minute attempt yesterday and requested a third bailout, in the form of a 29.1 bln euro, two year loan. European creditors replied that the new bailout could still be considered but they need to wait until the Greek referendum on Sunday 5th July. The Greek crisis continues to remain uncertain, causing high volatility across the global equity markets and the European currency.

Asian equity markets rallied for a second consecutive session overnight. The Hang Seng index climbed 1.09% higher and the Nikkei index rose 0.46% towards 20,350. In the US, the Dow Jones rebounded strongly from recent losses and ended in positive territory yesterday, while the NASDAQ and S&P 500 indices gained 0.57% and 0.27%, respectively.

DAX index

DAX Index (Deutsche Boerse AG Ge 2015-07-01 08-52-54

We experience strong upside momentum across European equity markets this morning. The DAX, CAC, IBEX and London equity benchmark indices climbed higher between 0.55% and 1.0%, while the Athens Stocks Exchange and the Greek banks remain closed for a third consecutive day. The euro slid lower this morning towards 1.11 against the USD, as investors are cautious following the Greek crisis.

EURUSD

EUR Curncy (Euro Spot )  Daily 02 2015-07-01 08-52-31

We received fairly mixed Chinese manufacturing data. HSBC’s manufacturing PMI was reported at 49.4 in June from 49.6 in May, missing analysts’ expectations and holding below the 50.0 level. China’s manufacturing PMI was unchanged at 50.2 in June, while the non-manufacturing PMI figure rose to 53.8 in June from 53.2 in May.

Today, the main focus will be on the release of the manufacturing PMI data from the US, UK and Eurozone as well as US ADP employment change and layoffs figures. Please note, the US non-farm payrolls figures will be released tomorrow due to the US holiday on Friday. The USD index continues its upside momentum holding above 95.5 against a basket of currencies.

USD index

DXY Curncy (DOLLAR INDEX SPOT)   2015-07-01 08-51-33

Crude oil prices reversed recent gains and slid lower in early trade this morning ahead of the release of the weekly EIA oil inventories report. Brent front month futures dropped towards $62 per barrel and WTI front month futures retreated over 1.8% in early trade to retest $58 per barrel. In precious metals, silver extended declines towards $15.50 while gold hovered around $1170/ounce.  

 

Events for today:

0200

CN

Jun

Manufacturing PMI

0200

CN

Jun

HSBC Manufacturing PMI

0600

JP

Jun

Manufacturing PMI

0855

DE

Jun

Markit Mfg PMI

0900

EZ

Jun

Markit Mfg PMI

0930

UK

Jun

Markit CIPS Mfg PMI

1230

US

Jun

Layoffs

1315

US

Jun

ADP Employment Change

1445

US

Jun

Manufacturing PMI

1500

US

Jun

ISM Manufacturing

1500

US

May

Construction Spending

1530

US

w/e

EIA Energy Stocks

 

All times UK Local Time

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