Asian markets jumped following news of a deal for a 50% haircut on Greece’s debt. The Nikkei gained 2% to 8927, the Kospi advanced 1.5%, and the ASX 200 rallied 2.5% hitting its highest close in 3 months. In China, the Hang Seng rose 3.3% to 19689, led by railways, and the Shanghai Composite edged up .3%.
European markets soared, led by banks which rocketed up 9%. The CAC40 jumped 6.3%, the DAX jumped 5.4%, and the FTSE rallied 2.9%. In France, the 3 leading banks, Credit Agricole, Societe Generale and BNP Pariba,s all posted gains greater than 20%.
The upbeat sentiment continued in the US, sending the indexes sharply higher. The Dow gained 340 points to 11209, the Nasdaq climbed 3.3%, and the S&P 500 jumped 3.4%. The VIX tumbled 14.7% to 25.46 as investor anxiety eased. Here too, financials were the outsized gainers.
Dow Chemical shares jumped 8.2% even though the company reported earnings which were slightly shy of expectations. Visa gained 2.6% after reporting profits that were in line with estimates.
Currencies
The dollar plunged as the market return to risk-on mode. The Australian Dollar was the biggest gainer, soaring 3.1% to 1.0722. The Swiss Franc rallied 2.4% to 1.1628, and the Euro advanced 2.1% to 1.4188. The Yen once again touched a new record high, tagging 75.67, before pulling back to 75.97, up .4%. The Canadian Dollar broke back through the parity level, climbing 1.4% to .9911.
Economic Outlook
GDP rose at an annual rate of 2.5%, slightly better than forecast, and a marked improvement from last quarter’s 1.3% gain.
Weekly jobless claims came in at 402K, slightly better than last week, but a bit weaker than forecast. Pending home sales unexpectedly declined by 4.6%, a large increase from last month’s 1.2% drop.