Hopes for an imminent Greek deal buoy markets

Thursday, June 11, 2015

Another bullish session for global equity markets today as the positive sentiment from the Asian session spilled over to European trading and impressive US macroeconomic data releases buoyed investor confidence. Pressure remained on Greece to accept some concessions that were seen as vital to any potential deal on its debt restructuring with the focus on PM Alexis Tsipras to reach an amicable agreement with creditors after four months of stalemate. Yesterday’s talks between the leaders of France, Germany and Greece failed to produce any meaningful results but investors are hopeful that today’s meeting between the Greek PM and European Commission President Jean-Claude Juncker will help resolve some of the key issues that have otherwise stymied progress. The euro erased yesterday’s tentative gains, trading back down towards 1.1180 against the dollar as investors grew restless with the lack of progress, before partially recovering some of these early losses, trading around 1.1240 at the time of writing.

The dollar index snapped a three day losing streak today, lifting firmly above 95.000 against a basket of major currencies as on the whole bullish US data encouraged investors back into the greenback. While initial weekly jobless claims were up slightly week-on-week, with 279K new claims during the week ending June 6th, today’s data release marks a fourteenth straight week where initial jobless claims have been below 300K and signalled at the encouraging prospects for a slowly improving labour market. Advance retail sales which increased 1.2% m/m in May, broadly in line with analyst expectations, offered another bright spot for the US economy, improving substantially from the previous months revised reading of 0.2% m/m and marking the third straight month of growing sales. Of course, the rhetoric surrounding the Fed still stands, as we continue to see encouraging data points and indicators for the US economy the prospect of a rates rise in the near term and the number of market participants expecting the Fed to act sooner rather than later continues to gain pace.  

EUR trades back under pressure

EUR Curncy Euro Spot Daily 11 2015 06 11 13 41 14

Initial weekly jobless claims hold under 300K

INJCJC Index US Initial Jobless 2015 06 11 13 44 13

US May retail sales build investor confidence

RSTAMOM Index Adjusted Retail 2015 06 11 13 46 51

More from: Kash Kamal