The Daily Market Updates – 16th July 2015
Greece Votes Yes
The Greek parliament voted to accept substantial economic reforms, other European parliaments will now vote on providing a fresh bailout. Equities across the board opened higher as the news was seen as a step in the right direction.
Expected to be a non-event, all rates forecasted to be kept on hold. The meeting will be dominated by Greece. A decision is due by the ECB on extending Emergency Liquidity Assistance (ELA) and this is generally leaked by sources before any formal announcement. A focus on how tough a stance ECB will take against Greece will be the main focus, but most analysts expect them to be quite lenient in order to ensure financial stability.
The Euro continues to see weakness across the board, especially against Sterling where these levels have not been seen since November 2007.
The Daily Market Updates – 15th July 2015
Greek Parliamentary Vote
This evening will see Greek MPs vote on a package of tax rises and spending cuts, the vote is seen as the major hurdle to a final agreement for the bailout. The IMF have suggested they may not be able to back any Greek deal unless Greece is granted more reprieve on debt relief.
China saw a 7% growth according to their latest GDP report. Asian stocks erased most of their recent gains Wednesday as investors feel that the “better than expected” data may mean Chinese officials hold back on stimulus.
US Retail Sales Miss
Tuesdays large miss on the headline retails sales may hint at slower economic growth. The unexpected fall was attributed to a cut back on purchases of automobiles and a range of other goods.
Bank of Canada Rate Decision
Analysts are forecasting a cut in the key lending rate, of around 25 basis points. This would be the second time this year that the BoC have lowered the rate.
UK Wage Growth and Jobless Rate
UK wage growth has risen according to the UK employment report released today, but its mixed news as the unemployment rate rose for the first time in two years.
German DAX seen breaking out of a trend channel, with recent Greek hopes having pushed it high. Traders are now watching for a sustained and confident move higher.
The Daily Market Updates – 14th July 2015
Bank of England governor Mark Carney became the first witness to be grilled by the new-look Treasury Select Committee today. Initially beginning on Greece the governor said “Greek debt profile is not sustainable in current form”. This turned out to be the calm before the storm when Mr Carney targeted domestic interest rates saying “the time for BOE rate increase is moving closer”. This caused a quick fire rally in Sterling, and Gilt yields to increase. The pace of interest-rate increase likely to be gradual, but necessary, given the performance of the economy.
UK Inflation drops back to zero – summer sales and cheaper oil weigh on prices. This is unlikely to change the BoE’s view on future interest rate path as they consider this period of low inflation to be temporary, with prices forecast to risetowards the end of the year. The UK government welcomed the figures as they represent a boost to disposable incomes.
Iran sign a historical deal with the P5+1 nations, stating they will never seek or develop nuclear weapons. Brent Crude saw losses of around $1.15 per a barrel. Iran will be able to increase their oil exports by up to 60% within a year, according to Reuters news agency. Even a modest output by Iran may put further pressure on the over supplied oil market.
The Daily Market Updates – 13th July 2015
Greece very much still in the headlines, but progress appears to have been made with Greece capitulating, as Alexis Tsipras has apparently backed down and surrendered to European demands. An agreement is now in place which requires the Athens government to pass new legislation, as well as several Eurozone governments requiring government approval before a bailout can be released. They have until Wednesday to pass legislation on key creditor demands, as well as other spending cuts and tax increases. Equities have rallied and this has been helped by a sustained rebound in Chinese equities. The Euro has weakened against Friday’s close as it looks to resume its negative correlation with equities. Federal Reserve Chair Yellen recently reported (once again) that she expects US interest rates to rise later this year.
Iran Nuclear Deal
The self-imposed deadline looks likely to go to the wire but there has been whispers of a deal reported by the Associated Press. The signals are reported as positive and a deal will most likely happen. Oil prices have remained volatile today as any positive deal will open up Iran to provide oil to the global market, adding more supply to an already over supplied market. Saudi Arabia, the world’s largest oil producer, pumped a record 10.56 million barrels per day last month.
The Daily Market Updates – 9th July 2015
China’s regulators curb downside
China stocks rebound after big losses yesterday. Drastic measures imposed by regulators seemed to have cooled the fall in prices. Recent volatility suggests that more erratic moves are possible. The Hang Seng index closed Thursday +3.7%, but across China 1,500 stocks were not trading.
Weidmann looks to force Greece into a deal
ECB and Bundesbank Weidmann has said that ECB “shouldn’t provide anymore emergency funding to Greece” and “has no mandate to safeguard the solvency of banks and governments”. Greece has a deadline of the weekend and concerns with the US Federal Reserve grew regarding a ‘Grexit’, with recently published minutes from the FOMC meeting showed some members expressing concern.
Bank of England held its regular policy meeting today, as expected there was no change to monetary policy.
The Daily Market Updates – 8th July 2015
Yesterday’s emergency Euro group meeting and Euro leaders’ summit engaged in Greek talks as expected, however no further direction has been established. No new proposals were brought to the table but today Greece has requested a 3 year bailout from the European Stability Mechanism (ESM), and made promises to implement tax reforms. ECB governments are to hold conference call today.
China Free Fall
China’s stock regulator said there is a “panic sentiment currently within our stock market” with “unreasonable selling” pressure. Two of China’s four biggest ETFs are down 10% – limit down despite calls by the government to boost blue-chip companies. Over 50% of Chinese listed firms are currently suspended with investors holding risky leveraged positions.
Today sees the release of the UK budget and Chancellor Osbourne. No market moving data is expected to come of this but particular focus will be given to Sterling and UK Gilts.
Minutes to the June meeting released this evening. We will get a better idea on how the US Federal Reserve views current international developments (such as Grexit), as well financial developments back home with particular focus on future rate rises.
Still seeing a strong dollar. The brekdown failing to find support at the 38.2% retracement, currently sitting at support seen on the 10th June.
The Daily Market Updates – 7th July 2015
No News from Greece
The world awaits news on Greece, with EURUSD seeing weakness over the impending default. This would be the first time whereby a developed country does not fulfil its debt obligation to the International Monetary Fund (IMF). Greece are currently looking for a €7B loan over the next 48 hours and they have currently placed a new proposal with the Eurozone’s top decision makers who are holding a euro group meeting today.
Ministers across the EU are said to welcome the current change within the Greek Finance Ministry, as they feel that Tsakalotos is a man who knows his responsibilities and can perhaps communicate a little less aggressively. Any chance of any debt restructuring has firmly been opposed, under the current bailout rules no debt write-down is possible. Apart from seeking help from the Eurozone, Russia has been rumoured to be discussing potential investment cooperation with Greece. Many market analysts have called today the genuine last chance for Greece to offer an acceptable deal.
A further EU summit is being held this evening and no doubt Greece will be top of the agenda. We can see the Euro printing down against a majority of the majors across the globe, significantly breaking down lower against the USD.
US Dollar strength across the board, in particular against UK sterling, off 160 pips today.
The Daily Market Updates – 6th July 2015
Greece – Democracy Decides
The Greek people have voted resoundingly to say “No” to further austerity. This vote, as many commentators had thought, was not “anti-Europe”… it was a simple “No” to the current offer on the table. Some confusion now remains within Europe as Finance Ministers appear to be unable to even decide what must be discussed in order to progress from here. The Greek Finance Minister, Yanis Varoufakis, has resigned – apparently having been made aware that he was considered “unwelcome” to any future discussions involving other European ministers. The fact that he is not welcome cannot have come as a surprise, and neither can the vote result itself.
The EURUSD has stabilised having gapped down by over 1% initially, and is now trading $1.1030. It did reach a high of just under $1.1100 earlier – which is an area of previous, proven resistance, and also where the 10 day SMA is currently positioned.
The Daily Market Updates – 1st July 2015
Greece Continues to Slide
Equities have continued their current choppy trend due to the ongoing Greek saga. Greece Prime Minister Alexis Tsipras has sent a letter stating that the Hellenic Republic is ready to accept most of the expired bailout offers. Equity markets reacted accordingly to the positivity with a brief sell off in the bonds. The German DAX 30 has a significant gap to close from the 26th June and will look to push up if good news begins to flow out. The letter has been rejected by Eurogroup heads. A new letter has been sent and Tsipras has recently just announced he will make a public announcement.
UK Manufacturing Playing its Part
Solid sell off in cable (GBPUSD) as a weak PMI manufacturing disappointed the market, 51.4 Vs. 52.5 exp. Bank of England (BOE) released their Financial Stability Report and Governor Mark Carney said that “low interest rate environment to continue for some time”. They are also concerned regarding the Greek situation as he said “Greek crisis has worsened stability outlook”. The pound is looking to test daily support around $1.5624/07 with a break there leaving a test of $1.5434 possible.