Ger30, UK100 and SP500 are CFD’s, written over the Dax30, Footsie100 and S&P500 Index futures:
At the beginning of the session, the European indices traded with some gains. Last night, the Greek Parliament approved with comfortable majority (229 votes) some measures from the agreement sealed on Monday. The dissenting votes (64) came from the Golden Dawn party (Far-right), some members of the coalition party (Independent Greeks), and several members of Syriza (among those 32, who opposed, the President of Parliament) beyond 6 abstentions also from Members of this party. This malaise within Tsipras’ party was already evident by the fact that half of the members of the Central Committee of the Syriza have signed a motion condemning the agreement. Next Wednesday the Parliament of Athens will vote other measures provided by the recent agreement. If the fractured Syriza is not remedied it may rise questions regarding the stability of the Government. Now, the agreement will have to be voted in some countries such as Germany, Slovakia, Finland, the Netherlands and the Baltic countries. In the immediate, the European Commission proposed to grant a short-term loan to Greece of € 7,000 M. to meet repayments ahead especially the ECB. Today’s ECB meeting will be marked by the aftermath of the Greek Parliament vote. The ECB’s communication in relation to other topics should be quite similar compared to previous meetings. At the press conference, the Greek issue should be the focus of journalists. The possibility of increasing the line of liquidity to Greek banks, thus allowing the possibility of the ECB Treasury Greek issue short-term debt should be some of the questions.
US markets closed with modest variations, a session in which investor sentiment was influenced by two opposing factors: the less conciliatory words of Janet Yellen and good corporate earnings. Yellen said that if the economy continues to progress at this rate most likely the Fed will raise the interest rates this year. She said that the unemployment rate will continue to decline gradually and that the expansion of the economy could be strengthened by a renewed surge in private consumption. At this stage, the Chairman of the Fed considers Greece and China as the biggest threats to the US economy. The Fed’s Beige Book described a US economy that continues to grow moderately in the 50 states that make up the Union. Industrial production remained unchanged in June, falling short of 0.20% estimated. This negative variance was mainly due to the fall of 3.70% in car production. Excluding this fall, industrial production would have grown 0.30%. Bank of America reported an EPS of 0.45 USD, exceeding the 0.36 USD estimated. Revenues amounted to 22120 M.USD, also exceeding estimates (21320 M.USD). Shares of Bank of America appreciated 3.21%. Today at 15:00, the Chairman of the Fed will be present in the Senate, where it repeats the testimony from yesterday and will be put to the questions of the senators.
The Japanese stock market benefited not only the developments in Greece, as well as the words of the Chairman of the Fed, which led to an appreciation of the Dollar against the Yen. In China, the market had a very volatile behavior, with investors still cautious about the recent correction.