A lot of the worries about what could happen if Greece were to default on its debts and Grexit driven trades rapidly unwound Monday after Greece produced a new series of proposals. For a change, both sides appeared encouraged which was enough for traders to act on particularly in stocks with the Dax soaring over 3.0% in a big relief rally and possible short squeeze. Meanwhile, Greek treasury yields fell about 150 basis points on the day and gold crumbled, taking a $15.00/oz loss on the day. The latest news making the round is that Greece has apparently agreed the principle of extending its current bailout program. Apparently debt relief would come as part of a later, separate round of negotiations. Although a deal wasn’t done today, the risk of an imminent Grexit has gone down dramatically for now but as we have seen before, could come roaring back at any time until a deal is actually struck. Perhaps some healthy scepticism by traders who have seen this all before would explain the more cautious tone struck by EUR which did not participate in today’s European rally. Taking their lead from Europe, US stocks also traded higher on the day, also getting a boost from better than expected existing home sales which rose to their highest levels in over five years. Crude oil, meanwhile spent the day hovering around $60.00 dropping in the morning and rebounding in the afternoon. With work on the Greek proposal going on behind the scenes and the next big round of talks later in the week, the focus for the next 24 hours may shift to the flash manufacturing PMI reports due for around the world and US durable goods orders. Flash PMI gives the first indication of how economies around the world are doing in June and what kind of momentum they have heading into the summer. China and Japan could attract attention during trading hours while the US report could spark another round of trading on Fed interest rate speculation. Durable goods orders, meanwhile may give a better indication of whether last month’s improvement was one-time or the start of a more positive trend after several months of declines earlier this year. Corporate News There have been no major announcements following the US market close today. Economic News Significant announcements released overnight include: ECB QE purchases €11.9B last week, €48.0B last 4 weeks below €60B/month stated target US Existing home sales 5.35M vs street 5.26M Upcoming significant announcements include: 10:00 am AEST Australia leading index previous (0.1%) 11:30 am AEST Australia house prices street 7.4% vs previous 6.8% 11:30 am AEST Japan flash manufacturing PMI street 50.5 11:45 am AEST China flash manufacturing PMI street 49.4 3:00 pm AEST Singapore consumer prices street (0.4%) 3:00 pm AEST Singapore core CPI street 0.4% 8:00 am BST France flash manuf PMI street 49.6 8:00 am BST France flash service PMI street 52.6 8:30 am BST Germany flash manuf PMI street 51.2 8:30 am BST Germany flash service PMI street 53.0 9:00 am BST Eurozone flash manuf PMI street 52.2 9:00 am BST Eurozone flash service PMI street 53.6 10:00 am BST Italy retail sales street (0.5%) 8:30 am EDT US durable goods orders street (1.0%) 8:30 am EDT US durables ex transport street 0.5% 9:00 am EDT US FHFA house prices street 0.5% 9:45 am EDT US flash manufacturing PMI street 54.1 10:00 am EDT US new home sales street 523K CMC Markets is an execution only service provider. The material (whether or not it states any opinions) is for general information purposes only, and does not take into account your personal circumstances or objectives. Nothing in this material is (or should be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by CMC Markets or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.
Greece sparks a relief rally, Flash PMI up next
02:00, 22 juni 2015