European stock markets have opened strong on Tuesday as a new bailout plan is approved for Greece. European leaders have reached a unanimous agreement after lengthy overnight discussions and are ready to approve a new cash-for-reforms deal that will allow Greece to continue to be part of the bloc and maintain the shared currency. So far, the UK’s FTSE 100 has gained 0.73% and is trading at 6722.49, the German DAX has gained 1.15% to trade at 11445.57 and the French CAC 40 is trading at 4978.47 after gaining 1.54% since the markets opened this morning. The euro also strengthened as a result of the most recent round of optimism. After initially falling to $1.109, the shared currency climbed up to $1.1135. The euro also strengthened against the yen, fetching 136.58 yen after going as low as 135.4. At the same time, U.S. dollar barely moved against its peers, as the dollar index remained steady at 95.950. The euro was aided by rumors that the European Central Bank (ECB) is willing to postpone a 3.5 billion euro Greek repayment that is due on July 20.
In the meantime, Asian markets rallied, regaining some of the losses seen since mid-June. Japan’s Nikkei 225 added 1.6% while MSCI's index of Asia-Pacific shares outside Japan added 0.8%. Gains were led by positive Chinese data indicating that exports have risen by 2.8% and that imports have declined by 6.1% in June, both beating prior expectations. Chinese GDP data is expected to release on Wednesday and is expected to miss Beijing’s 7% growth target for the year. The many support measures employed in order to slow down the rapid decline seen in Chinese shares have aided the CSI300 index of the largest listed companies in Shanghai and Shenzhen to gain an additional 3% after rallying 5.7% last week.
Crude Oil posted a sharp 1.93% decline and is now trading at $51.72. Oil prices are falling as Iran and the six world powers are getting close to reaching a nuclear deal that would see the oil-giant add to the global oil surplus that has pulled prices down dramatically last year. Adding to the downward pressure is the dwindling demand expectations in China.
The coming week holds a number of important economic data releases. On Tuesday, UK inflation data will be released with consumer price index (CPI). Later that day U.S. retail sales will be revealed, followed by API’s survey of crude oil. Chinese GDP will be released on Wednesday.