US stocks fell sharply at the open on Monday, but pared losses during the day after Greek voters rejected the bailout proposal terms in referendum on Sunday. The S&P 500 fell 0.4% to 2068.79. US Treasury prices rose, and yields fell to a two week low, as the increased risk of Greek exit from the eurozone sparked a flight to haven assets such as Treasuries and other government bonds. The dollar strengthened, with the ICE dollar index up 0.1% at 96.22. Shares of Aetna Inc (NYSE:AET) fell 6.4%, after the health insurer announced on Friday it would buy Humana Inc (NYSE:HUM) for $37 billion. Energy shares were hit hard as oil prices fell on Monday, oil companies National Oilwell Varco Inc (NYSE:NOV) and Transocean Ltd (NYSE:RIG) fell 5% and 4.3% respectively. Today at 13:30 CET, May Trade Balance will be released in the US. The tentative outlook is negative. At 15:00 CET, June Job Openings and Labor Turnover Summary will be released by the Labor Department. The tentative outlook is negative for the dollar. At 20:00 CET, July Consumer Credit will be released. The tentative outlook is negative.
European stocks tumbled on Monday after Greek voters overwhelmingly rejected austerity measures demanded by creditors. Most of the regional indexes recorded losses of more than 1% after more than 61% of Greeks voted against the reform plans demanded by eurozone, European Central Bank and International Monetary Fund in return for extending the bailout. The Stoxx Europe 600 fell 1.2%, with bank stocks leading the losses. Germany’s DAX 30 fell 1.5%. The euro fell 0.4% against the dollar. The ECB on Monday left unchanged the level of emergency liquidity assistance available to Greek banks. Instead, it raised requirements for collateral quality, which means Greek banks will have to pledge more collateral than before for emergency funding. Greek Prime Minister Alexis Tsipras promised German Chancellor Angela Merkel that Greece would bring a new proposal. Today at 12:00 CET, eurozone leaders will meet in Brussels. Yanis Varoufakis on Monday resigned as Greece’s finance minister, and bank holidays and capital controls were extended through Wednesday. In economic data today, May industrial production was weaker than expected in Germany. At 9:30 CET, May Manufacturing and Industrial Production will be released in the UK. The tentative outlook is positive for the pound.
Nikkei today gained 1.3% after tumbling 2.1% on Monday. Tomorrow at 00:50 CET, May trade balance, current account, June bank lending will be released in Japan. The tentative outlook is positive. At 6:00, Eco watchers survey will be released. The tentative outlook is negative.
Chinese stocks fell today after stabilizing on Monday, despite the fact that China's major insurance firms bought tens of billions of yuans worth shares of blue-chip exchange-traded funds and large caps on Monday, and measures by authorities to curb new share issues and promises by brokerages and fund managers to buy at least 120 billion yuan of stocks. The Shanghai Composite Index has plunged 12.1% last week. Commodities are falling, as the falling stock market doesn’t bode well for the prospect of China’s economy.
Oil prices are edging up today, after falling to lowest settlement in nearly three months on Monday over Greece's rejection of bailout terms and China's falling stock market.
Gold prices snapped a three-session losing streak and settled higher on Monday, helped by haven-related demand.