Ger30, UK100 and SP500 are CFD’s, written over the Dax30, Footsie100 and S&P500 Index futures:
In the beginning of the session the European markets traded with some gains. Continuing Greece as center stage of the current situation, it’s creditors will present today a final proposal. It was reported that the proposal should include reforms of the labor market and the pension system, privatization and changes in the functioning of the public system. The outline of this proposal should be submitted today to the Greek Prime Minister when he meets the President of the European Commission. This document represents a change compared to recent months as constituting a joint proposal from creditors, signaling that the differences between the IMF and European leaders were exceeded. This union increases pressure on Greece, whose authorities had indicated divisions among lenders as the main cause for the failure of negotiations that extend for months. A spokesman for Syriza said that if no agreement is reached until Friday his country will not repay the IMF. Today will take place the meeting of the ECB, a extraordinarily Wednesday. The ECB meetings are scheduled on Thursdays, a total of 8 meetings per year. Until last year, the meetings were held monthly and always at the first Thursday of the month. As tomorrow is a holiday in Germany (Corpus Christi) and the ECB is based in Frankfurt, the meeting was brought forward to today. At the press conference that integrates the meeting, Mario Draghi should not depart significantly from the general lines of the previous meeting, reaffirming economic forecasts and analyzing the first effects of the debt purchase program. During the press conference Mario Draghi will be questioned about the situation in Greece but will likely adopt a diplomatic stance.
After an initial pressure, caused by the weakness of European markets, US indices closed higher. Despite investors on Wall Street remain focused on economic data may not alienate the events in Europe, with the date of repayment of Greece to the IMF to approach without an agreement on the horizon. A part of the weakness of the US markets is related to the fall of more than 1% of the utilities sector, justified by the rise in sovereign yields. Yields to 10 years ended in 2.27% after last week they negotiated at lower levels to 2.20%. In May, they were sold 17.79 million vehicles (annualized number), against estimates of 17 million, an increase of 8% from the previous month. Among the major brands stood out Fiat Chrysler, General Motors and Ford. Shares of these companies ended without major fluctuations. BMW’s sales rose 4.70%, Mercedes increased 11.10% and Volkswagen 8%. The numbers are encouraging, considering that car sales account for an important share of domestic consumption. The most recent economic data have pointed to a very restrained domestic consumption, contrary to expectations of the equity markets that the US economy will recover in the 2nd quarter. In the technology sector, Intel shares lost 2%, as investors show themselves something skeptical about the intention to acquire Altera. Today, the spotlight will fall on Europe and on the impact of various economic data in sovereign yields.
China published the PMI index for services which registered an increase from 52.9 to 53.5. Although this data is positive, investors are concerned with the worrying signs of the industrial part of the economy. In Australia the GDP in the 1st quarter grew 2.3%, more than the 2.10% estimated. In Japan, the consolidation of the yen against the dollar prompted many investors to make some profit-taking.