Ger30, UK100 and SP500 are CFD’s, written over the Dax30, Footsie100 and S&P500 Index futures:
European markets opened slightly lower, a day after the US Federal Reserve meeting and with investors in a sense of disappointment at the current impasse between Greece and its creditors. In fact, today wins on greater significance in this regard, as at 11.00 will meet in Brussels the Eurogroup (where will be gathered the finance ministers of the Eurozone). The main theme of this event is the Greek situation and many investors and economists point to it as the last possibility of Greece and its creditors reach an agreement. It is not excluded that the European countries present Greece a new proposal, which would probably be a temporary solution that would allow the country to receive a portion of the tranche that was suspended since February (7200 M €) in exchange for the adoption of certain measures. Thus, this hypothetical proposal would not aim at solving the structural problems of Greece but would be more an extension of the second ground plan and that would give more time for negotiators to reach a more lasting solution. Even not reached an agreement today, is not to rule out the possibility of being scheduled an extraordinary meeting, by the Eurogroup or by the European Council. The Spanish banking sector may capture part of attention, after Moody’s have completed the review of 20 Spanish banks, which resulted in a strengthening of the sector’s image in the international financial markets. Twelve of these institutions received a rating upgrade (such as Santander and BBVA), 5 kept the previous rating and only two were downgraded (KutxaBank and Ibercaja). In the technology sector, companies like the German SAP may be influenced by the fact that US rival Oracle have reduced its profit estimates and revealed that weaker sales in its traditional unit of software licenses were penalized by the appreciation of the dollar.
The US market ended with modest gains, on a day when the dominant theme was the Federal Reserve meeting. The key interest rates were kept close to zero, but the members of this body expressed to believe that economic growth must support one or two increases in interest rates before the end of the year. The Chairman of the Fed, Janet Yellen emphasized the importance of rhythm and increases path of interest rates and said the timing of the first increase is less important. The labor market is improving and some of the downward pressure of inflation, triggered by energy prices, is fading, but added that further progress is needed before the central bank start a interest rate hike cycle. In general, the Fed proved cautious but optimistic about the economy. Most Central Bank’s members intend to raise interest rates this year and only two of 17 members are convinced that this start should only be done in 2016. Most CNBC respondents believe that the first increase in interest rates in nine years will happen in September. In this sense, a change in interest rates at the July meeting seems unlikely, since the Fed will want to wait for more evidence in relation to GDP growth in Q2. Regarding companies results, FedEx lost 2.96% after its quarterly results had left short of forecasts. Attention today will focus not only on the progress of the Eurogroup, but also in the publication of relevant economic indicators.
Asian markets ended negative. In Tokyo, investors did not react in the best way to the words of Janet Yellen, while the main exporters in the country have been penalized by the appreciation of the Yen.