ts the last day of the month and the quarter and the first half of the year, bringing with it a ton of trading activity amid swirling rumours around Greece, Iran and other areas.
Let’s start with Greece, who has already indicated that it won’t be making the payment to the IMF due today. Meanwhile, lots of chatter has been swirling about a new offer from the EU, which have been denied but there was talk out of Germany that Greece could tap into emergency funding. Meanwhile rumours have been swirling that Greek PM Tsipras is on his way to Brussels and that negotiations have been continuing but this has been denied as well. With the bailout running out tonight, a lot could happen over the next several hours that could move markets significantly.
So far, European indices have stabilized after yesterday’s big takedowns, trading close to flat for the most part. EUR has levelled off near $1.1200 consoldiating yesterday’s rebound, while defensive plays like gold and CHF have been falling back. Treasury yields across the continent are lower today except for Greece which us up a more modest 40 basis points approaching but remaining below 15.0%.
US stock markets are also on the rebound today trying to recover from yesterday’s damage. With Greek related pressure easing for the moment, traders may get a better idea of how much Puerto Rico’s debt problems (potential for default on $70B of debt mainly owed to US financial institutions) is having on the financial sector. Chinese stocks bounced back a bit today as the PBOC cut 7-day interest rates and rumours swirled about the potential for more supportive measures including allowing the national pension fund to invest in stocks.
Crude oil is bouncing back a bit today as the deadline for a nuclear deal with Iran approaches. It’s been reported that negotiations could be extended. Meanwhile, Iran apparently has sent more senior people to Geneva, suggesting that progress is being made, that the talks are being taken seriously and that a deal could be close. A successful completion to negotiations could enable Iran to resume exporting crude oil in future.
CAD has turned downward today after April Canadian GDP fell 0.1% from March and the economy grew only 1.2% over hear, below street expectations. This has rekindled speculation about a potential interest rate cut from the bank of Canada. Still, the loonie is down nowhere near as much as NZD which was totally crushed overnight after a business confidence and outlook survey nosedived way below expectations indicating growing pressure on the RBNZ to cut more and soon.
Cenovus has agreed to sell its royalty business to Ontario Teachers Pension Plan for $3.3B
Significant announcements released overnight include:
Canada Apr GDP (0.1%) over month vs street 0.1%
Canada Apr GDP 1.2% vs street 1.5%
UK Q1 GDP 2.8% vs street 2.5%
Germany retail sales (0.4%) vs street 2.8%
Germany unemployment chang (1K) vs street (5K)
Germany unemployment rate 6.4% as expected
France consumer spending 1.8% vs street 1.5%
Italy unemployment rate 12.4% vs street 12.3%
Italy consumer prices 0.2% as expected
Eurozone unemployment rate 11.1% as expected
Eurozone consumer prices 0.2% as expected
Eurozone core CPI 0.8% as expected
Greece retail sales (3.3%) vs previous (0.4%)
NZ ANZ activity outlook 23.6 vs previous 32.6
NZ ANZ business confidence (2.3) vs previous 15.7
NZ building permits 0.0% vs previous (1.7%)
Australia new home sales (2.3% vs previous 0.6%
Japan labour cash earnings 0.6% vs street 0.7%
Japan real cash earnings (0.1%) vs street 0.2%
Japan vehicle production (16.6%) vs previous (7.5%)
Japan housing starts 5.8% vs street 5.5%
Japan construction orders (7.4%) vs previous (12.1%)
Upcoming significant announcements include:
9:45 am EDT US Chicago PMI street 50.0 vs previous 46.s
10:00 am EDT US consumer confidence street 97.4
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