Ger30, UK100 and SP500 are CFD’s, written over the Dax30, Footsie100 and S&P500 Index futures:
The European indices are trading in consolidation. The Eurogroup meeting will be the main event of the day. Last week, several European leaders reduced expectations regarding this event, stressing that still remain many obstacles in the way of an agreement. According to various news reported in the financial press, after the Government of Athens promoted a reshuffle of his team for the negotiations with Brussels, a less tense atmosphere was created at the negotiating table. However, although significant advances have been made especially for some, such as reforms of the labor market and the pension system. The outcome of the meeting also depends on the ECB’s decision against the maximum short-term debt that Greece can issue. Tomorrow Greece will have to repay 755 M. € to the IMF. During the end-of-week, the Greek government reduced its estimates for GDP growth, which is expected to grow 0.80% in 2015, less than the 1.40% forecast in March, when was addressed a letter, about the reforms, to the European Commission.
US markets closed on Friday with sharp gains, due to the employment report. In April, the US economy generated 223,000 jobs compared to 224,000 estimated. The unemployment rate came down from 5.50% to 5.40%, in line with economists’ forecasts. These figures were the best the market could expect in that are strong enough to significantly alleviate fears about the economy without compromising the expectations that the Fed will only increase benchmark rates by the end of 2015. The only variable that strayed marginally was the change in wages (+ 0.10% vs 0.20% forecast), which is another argument for the Fed to keep interest rates unchanged in coming months. Technically, the main theme of the next few days will be the S & P test the area of 2120, which in recent months is working as resistance for the upward movement of the index. If the S & P over this area, then it will be possible a new rally.
Asian markets closed higher, reflecting the decision by China’s central bank to reduce interest rates from 5.35% to 5.10%. Deposit rates were also reduced from 2.50% to 2.25%. This decision is the result of a evidences pointing to a sharp slowdown in the Chinese economy.