Greece Offers New Proposal to Creditors

June 22, 2015

The dollar, European stocks and European bond yields are higher.  Greek P.M. Tsipras offered a new deal, which wasn’t outright rejected initially, to the heads of the IMF, EU and ECB.  EMU finance ministers meet later today in Brussels.  The offer has engendered new optimism that a default and Grexit can be avoided.

Share prices in Europe advanced 8.2% so far today in Greece, 3.2% in France, 3.3% in Germany, 2.8% in Spain, 2.3% in Italy, 1.4% in Switzerland and 1.2% in Britain.

Equities elsewhere rose 1.5% in Hong Kong and India, 1.3% in Japan and Taiwan, 0.4% in Singapore and South Korea and 0.3% in Australia.

The dollar has appreciated overnight by 0.5% against the yen, 0.4% versus the kiwi, 0.3% relative to the Swiss franc and sterling, and 0.2% against the Aussie dollar.  But the U.S. currency edged down 0.1% against the loonie and is unchanged relative to the euro and yuan.

Ten-year sovereign debt yields jumped by eight basis points in Germany and seven bps in Britain.  The 10-year JGB dipped two bps, but futures trading in Treasuries point to a big increase in the 10-year yield at the open.

Among commodities, Comex gold is 0.5% softer at $1,193.85 per ounce, but WTI oil has firmed 0.5% to $60.07 per barrel.

The Bank of Japan’s monthly economic assessment rehashed the content from Friday’s post-Board meeting statement.  Moderate recoveries are seen in exports and overall GDP.

Chinese markets are closed for the Dragon Boat Festival.

Consumer confidence in New Zealand fell 3.7% in the second quarter.

Japanese supermarket sales recorded a 5.7% on-year increase last month versus a rise of 6.4% in April and an 8.6% drop in March.

From a 33-month low of 2.8% in April, unemployment in Hong Kong bounced up to 3.0% in May.  Hong Kong’s current account surplus of HKD 36.3 billion last quarter was 36% wider than the 4Q surplus.  There was a small unadjusted surplus of HKD 380 million against a HKD 4.7 billion deficit a year earlier.  Taiwan’s jobless rate held steady at 3.75% last month.

On-year Swiss M3 money growth was 1.5% in both April and May, down from 2.3% in March.

Danish retail sales fell by 1.2% in May after dropping 0.4% in April and posted a 3.8% on-year decline.  Danish consumer sentiment fell 3.2 points to a 9.8 reading in May after a decline of 0.7 points the month before.

Icelandic wage inflation ticked up 0.1 percentage point to 5.3% in May. 

Irish producer prices recorded a decline of 2.4% on month, which trimmed the 12-month increase to 6.3%.

The Greek current account deficit more than doubled between March and April to EUR 956 million in the latter month.

Still to come:  A decision on interest rates from the Bank of Israel.  Also Mexican retail sales, eurozone consumer confidence, U.S. existing home sales and the Chicago Fed National Activity Index.

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

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