Greek Talks Looking Grim

June 25, 2015

Daybreak on Thursday brings news of an ultimatum to the Tsipras government from its Troika of creditors, not the breakthrough that investors had been hoping to hear.  The deadline has already passed.  Final decision now moves on to eurozone finance ministers, who meet later this day, but the outlook for a deal does not appear encouraging.  Ultimatums are rarely constructive.

The sense of crisis is not apparent in overnight market movements.

  • The dollar rose 0.6% against the Swiss franc and 0.1% versus the euro, while falling by 0.4% against the Aussie dollar, 0.2% vis-a-vis the kiwi and 0.1% relative to the yen and loonie.  Sterling and the yuan are steady.
  • Ten-year sovereign debt yields have fallen 20 basis points in Greece, three bps in the U.K., and 2 bps in Germany but are up 4 bps in Spain and Italy and one basis point in Japan.
  • Gold and oil are unchanaged at $1,176.24 per ounce and $60.28 per barrel.
  • Share prices in Europe are down 0.3% in France, 0.2% in Germany and Switzerland, and 0.1% in the U.K. and Spain but up 0.5% in Greece and Italy.
  • Share prices in the Pacific Rim lost 3.6% in China, 1.3% in Hong Kong, 1.0% in Australia, 0.8% in New Zealand, 0.7% in Indonesia and 0.5% in Japan.

Stock and bond transactions last week in Japan generated a JPY 394 billion net capital inflow.  There had been inflows in the first two weeks of June, totaling JPN 1.707 trillion between them.

Bangko Sentral ng Pilipinas left the Filipino central bank rates unchanged as expected.  The last change was a 25-basis point hike in September 2014.

German consumer confidence slipped back in July to 10.1 from 10.2, reflecting concerns over the Greek debt talks.

Consumer confidence in South Korea slumped six points to a reading of 99 in June, reflecting the MERS outbreak.

Swedish PPI inflation slowed to 1.6% in May from 2.4% in April.  Domestic producer prices fell 0.3% on month.

The year-over-year slide in Spanish producer prices swelled to 1.4% in May from 0.9% in April, as energy tumbled 7.5%.

South African producer prices rose 0.8% on month in May after a 0.9% increase the month before, and the 12-month rate of rise accelerated to 3.6% from 3.0%.

The Filipino trade deficit of $301 million in April was significantly smaller than the deficit of $802 million a year earlier, thanks to a 12.8% dive in imports.

Malaysian unemployment edged up 0.1 percentage point to 3.1% in April.

The Confederation of British Industries released its monthly survey of distributive trade activities.  After a 39-point leap in May, the summary index fell back 22 points in June to a reading of 29.  Other than in May, that was the best score since January.

A policy decision from the Czech National Bank will be announced today, and no change in stance is anticipated.

Scheduled U.S. data arrivals today include personal income and spending, the PCE price deflator, the Kansas City Fed manufacturing index, Markit Economics preliminary service-sector PMI survey findings, and weekly jobless insurance claims.   But the main market event by far concerns the Greek debt talks.

Copyright 2015, Larry Greenberg.  All rights reserved.  No secondary distribution without express permission.

Tags: ,


Comments are closed.