United States - Earning season starts, FOMC speech tomorrow
Stocks up on optimistic expectations for earnings season. Investors are becoming more thick skinned, and increasingly comfortable with potential that the FED will slow QE. Expectations are that Q2 results will be soft, and show weak sales, expectations that results will pick up in the rest of the year. DJIA up 0.5%, S&P 0.7%, NDAQ 0.6%. NYSE Euronext will buy the LIBOR!The US dollar was up against the pound, yen, euro and the Swiss franc. It declined against the Canadian and Australian dollars. The Dollar Index was up 0.5%. T-Bill yields flat.
Europe - EURUSD hit, Aid with Greece, Italy downgrade
Stocks mostly higher for the second day after Eurozone finance ministers agreed on an aid disbursement for Greece (although lower than expected -> of course EURUSD took a hit). Doesn't look great for the public - take a look at this public sector worker dismissal policy : http://www.ekathimerini.com/4dcgi/_w_articles_wsite1_1_09/07/2013_508286
Markets’ gains weakened after the IMF slashed its global growth forecast. FTSE and SMI up 1.0%, DAX 1.1% and CAC 0.5%.EU finance ministers approved payment of €3bn to Greece, in 2 tranches – with strict conditions regarding the restructuring of its economy. €2.5bn to be paid this month, €0.5bn in October. Greece has to satisfy all agreed commitments in July itself. Reforms are mainly surrounding public admin and tax revenue collection.Banking stocks advanced. LVMH up after assenting to buy 80% of Loro Piana (Italian luxury cashmere clothing company) for €2bn. Shell announced a new CE. Mining stocks were up. S&P downgraded Italy's sovereign credit rating to BBB (previously BBB+) (after markets closed) with Outlook: negative.
Stocks up on optimistic expectations for earnings season. Investors are becoming more thick skinned, and increasingly comfortable with potential that the FED will slow QE. Expectations are that Q2 results will be soft, and show weak sales, expectations that results will pick up in the rest of the year. DJIA up 0.5%, S&P 0.7%, NDAQ 0.6%. NYSE Euronext will buy the LIBOR!The US dollar was up against the pound, yen, euro and the Swiss franc. It declined against the Canadian and Australian dollars. The Dollar Index was up 0.5%. T-Bill yields flat.
Europe - EURUSD hit, Aid with Greece, Italy downgrade
Stocks mostly higher for the second day after Eurozone finance ministers agreed on an aid disbursement for Greece (although lower than expected -> of course EURUSD took a hit). Doesn't look great for the public - take a look at this public sector worker dismissal policy : http://www.ekathimerini.com/4dcgi/_w_articles_wsite1_1_09/07/2013_508286
Markets’ gains weakened after the IMF slashed its global growth forecast. FTSE and SMI up 1.0%, DAX 1.1% and CAC 0.5%.EU finance ministers approved payment of €3bn to Greece, in 2 tranches – with strict conditions regarding the restructuring of its economy. €2.5bn to be paid this month, €0.5bn in October. Greece has to satisfy all agreed commitments in July itself. Reforms are mainly surrounding public admin and tax revenue collection.Banking stocks advanced. LVMH up after assenting to buy 80% of Loro Piana (Italian luxury cashmere clothing company) for €2bn. Shell announced a new CE. Mining stocks were up. S&P downgraded Italy's sovereign credit rating to BBB (previously BBB+) (after markets closed) with Outlook: negative.
Asia Pacific - Up but not away
Markets rallied, although were limited by concern regarding China's slowdown and liquidity problems, as well as general restraint prior FOMC June minutes’ release (due tomorrow; for which USD will probably rise although to a lower extent than most people think - it's already priced in! But I have a suspicion that as unemployment is still above 7% that QE could be delayed in which case we could see USD weaken, expecting EURUSD to reach 1.30 in this case). Encouraging news from Europe (re Greece/Portugal) along a decent start to Q2 earnings season in the US helped the rally to an extent.
Nikkei up 2.6% (http://uk.reuters.com/article/2013/07/09/markets-japan-stocks-idUKL4N0FF2BY20130709) although I believe that it will open lower tomorrow. For now, however, it is at its highest in more than a month (helped along by a weaker yen improving risk appetite)
Shanghai Composite up 0.4% after Monday's -2.4%. Hang Seng 0.5%.
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