U.S. and Eurozone stock markets were mostly up on Monday and the U.S. dollar strengthened as Greece secures another agreement with its lenders and China allowed its Yuan to fall to three-year lows. The Chinese central bank referred to the move as a one-time depreciation that weighed the Yuan down nearly 2%. According to the bank, the depreciation was the result of a new way of managing exchange rates that would better fit real market conditions. Other Asian currencies also fell, thus boosting the U.S. dollar. The dollar index, comparing a basket of currencies against the dollar, reacted with a 0.4% increase to 97.524. The euro also retreated against the dollar, trading at $1.0971. Against the Japanese yen, the dollar edged up to trade at 124.75 yen. The U.S. dollar is currently in a strong position as traders are preparing for a rise in U.S. interest rates as early as next month.
U.S stocks closed higher as energy prices surged on Monday. Leading in gains were Chevron (NYSE:CVX) and Exxon Mobil (NYSE:XOM), lifting the Dow Jones after a seven day losing streak, marking its longest losing streak since 2011. The index added 241 points, or 1.4%, to trade at 17615.17. The S&P 500 Index added 26 points, or 1.3%, to trade at 2104.18. The Nasdaq Composite added 58 points, or 1.2%, to trade at 5101.80 at the end of the session. The S&P’s gains were broad as nine out of its ten sectors rose during the day. Additionally, bond prices fell and the yield on 10-Year notes rose 2.23%.
In Europe, stock markets were mostly up as Greece and its international creditors reached a multi-billion euro bailout agreement that would aid the indebted country in making its next 3.2 billion euro repayment to the European Central Bank due on August 20. The UK’s FTSE fell 0.4% as the mining sector retreated. The German DAX added 0.7% as major insurer Allianz (XETRA:ALVG) added 1.6%. The French CAC 40 gained 0.7% as Unibail Rodamco SE (AMS:UNBP), AXA BNP Paribas (PARIS:BNPP) and Societe Generale (PARIS:SOGN) add between 0.3% and 1.6%.
U.S. employment data will be released today with the Nonfarm Productivity and Unit Labor Costs reports. Closely tied to commodities, Chinese industrial production data will be released on Wednesday. On Thursday, the European Central Bank will publish the accounts of its monetary policy meetings, followed by U.S. retail sales. On Friday, Germany will release its GDP data followed by Eurozone inflation data with the consumer price index.