Greek parliament votes on second bailout reforms tonight

Wednesday, July 22, 2015

European equity markets retreated sharply in early trade as investors remain cautious ahead of the Greek parliamentary vote this evening. There is increasing worries regarding Greece’s political uncertainty as a possible further conflict within Syriza could force the government into a minority position if Prime Minister Alexis Tsipras fails to gain sufficient support. Furthermore, tensions increased after the Slovakian Finance Minister reported that Greece could face a Grexit if bailout conditions were not met. The CAC, DAX, IBEX and London equity benchmark indices tumbled between 0.5% and 0.8% this morning, while the euro held around 1.0930 against the USD.

EURUSD holds around 1.0950 ahead of Greek parliamentary vote

EURUSD Curncy (EUR-USD X-RATE)   2015-07-22 09-03-26 

In Asia, the Nikkei index plunged nearly 250 points (-1.20%) towards 20,590. Bank of Japan Governor Kuroda reported that he expected inflation to accelerate significantly over the next few months due to a tighter employment market, while he insisted that he would not hesitate to ease monetary policy further, if necessary, but not in the short-term. The Hang Seng index retreated over 1.15% towards 25,230, while the Shanghai Composite index edged higher towards 4,030.  

Nikkei index tumbles below 20,600

NKY Index (Nikkei 225)  Daily 23 2015-07-22 09-06-07 

Precious metal prices came under renewed pressure this morning. Gold retreated below $1100/ounce and silver declined over 0.75% towards $14.50. Platinum and palladium also posted heavy losses in early trade. The softer USD fails to provide any support at the moment as the USD index reversed recent gains and slid lower towards 97.0 against a basket of currencies. Base metal and crude oil prices trade in negative territory this morning, as worries over a slowdown of Chinese economy weighs on market sentiment.

The main focus will switch to the release of the US FHFA house price index and existing home sales data. In the oil market, the release of the weekly EIA oil inventories report could provide further insight in the market. According to a Bloomberg survey, a decline of 1.45 mln barrels in crude oil stocks is expected for the week ending 17th July. Gasoline and distillate inventories are estimated to have increased by 565K and 1.68 mln barrels, respectively.

 

Events for today:

0930

UK

Jul

BOE minutes

1400

US

May

FHFA House Price Index

1500

US

Jun

Existing Homes Sales

1530

US

w/e

EIA Energy Stocks

 

All times UK Local Time

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