Greek Hopes Push up Euro, Treasuries Slide

Asian markets closed modestly lower, amid rising tensions over Greece’s debt troubles. The Nikkei eased .1% to 8918, the ASX 200 fell .5%, and the Hang Seng closed down fractionally. China’s Shanghai Composite tumbled 1.7% as steel companies dropped, while Korea’s Kospi edged up .4%.


China's Shanghai Composite Continues to Struggle, Dropping 1.6%

Indecision gripped European traders, leaving the major indexes mixed at the close. The CAC40 rose .2%, while the DAX slipped .2%, and the FTSE closed flat. Excitement abated over the potential merger of Xstrata and Glencore, as several major shareholders said they’d vote against the deal, sending shares of both companies down roughly 4%.

In the US, stocks inched up, lifted on hopes that a Greek debt deal was imminent. The Dow closed up 33 points to 12878, the S&P 500 gained .2%, and the Nasdaq rose .1%.

Currencies

An afternoon selloff in the Dollar pushed the Euro up .9% to 1.3248, its highest level in nearly 2 months. The Swiss Franc climbed .8% to 1.0963, the Australian Dollar rallied .7% to 1.0796, and the Pound gained .5% to 1.5895. The Yen slipped .3% to 76.81.

Economic Outlook

Consumer credit rose by $19.3 billion, nearly 3 times analyst estimates for a $7.7 billion increase, in a sign that the consumer spending is picking up dramatically. The TIPP economic optimism index rose to 49.4 from 47.5, more than forecast.

Asia Rallies, West Awaits Greek Deal

Equities

Asian markets rallied on Wednesday, with several of the major indexes climbing to multi-month highs. The Nikkei advanced 1.1% to 91016, a 3 month high, as Toyota raised its annual profit forecast by more than 30%. Similarly, the Kospi posted a gain of 1.1%, with leading shipbuilders advancing 6% on hopes the sector will soon recover. The Shanghai Composite surged 2.4%, and the Hang Seng jumped 1.5% to 21018, a 6 month high. The ASX 200 trailed its peers, rising just .4%.


Hang Seng Index Climbs to 6 Month High

The East’s impressive gains failed to make an impact on the West. European markets closed slightly lower, as the region anxiously awaits a Greek debt deal. The FTSE slipped .2%, while the DAX and CAC40 dipped less than .1%.

US stocks fared better, posting modest gains. The Nasdaq gained .4% to 2916, the S&P 500 rose .2%, and the Dow inched up 6 points to 12884.

Currencies

The Dollar gained modestly across the board. The Pound slumped .5% to 1.5819, and the Yen dropped .3% to 77.01. The Euro, Australian Dollar, Swiss Franc, and Canadian Dollar all ended down .1%, as the market braces for the outcome of Greece’s debt negotiations.

Economic Outlook

Weekly mortgage applications jumped last week, a healthy sign that the housing market is on the rebound.

Greek Lawmakers Reach Agreement, Market Unimpressed

Equities

Asian markets closed little changed, ahead of major rate decisions from Europe. The Nikkei slipped .2% to 9002, while the Kospi gained .5%. In China, inflation rose more than forecast, but market participants failed to notice. The Shanghai Composite rose .1% to 2350, and the Hang Seng closed flat. Australian shares closed down .2%, recovering from a 1.1% loss earlier in the day.

European markets advanced moderately, as the Bank of England and ECB kept rates unchanged. The UK’s central bank announced it would increase its quantitative easing program, and the ECB indicated it would work to make it easier for banks to get loans. The DAX gained .6%, the CAC40 rose .4%, and the FTSE edged up .3%.

Greece announced lawmakers had reached an agreement for an austerity plan, a key step in getting another bailout package, but the market reaction was minimal.

US stocks inched up for a 3rd straight day. The Dow rose 6 points to 12890, the Nasdaq advanced .4%, and the S&P 500 gained .2% to 1352.

Currencies

Despite two central bank decisions, and news of a Greek debt deal, the currency markets were relatively quiet. The Euro rose .2% to 1.3283, while the Swiss Franc and Canadian Dollar rose .1% to 1.0967 and .9953 respectively. The Yen sank .8% to 77.70. The Pound and Australian Dollar closed flat.

Economic Outlook

Weekly jobless claims fell to 358K, 11K better than forecast, and 15K better than last week. Wholesale inventories rose by 1%, significantly higher than the .4% forecast.

Doubts over Greek Bailout Weigh on Equities

Equities

Asian markets fell on Friday, as doubts lingered over the fate of Greece’s bailout package, even after lawmakers approved an austerity plan. The Nikkei declined .6% to 8947, the Kospi shed 1% to 1994, and the ASX 200 fell .9%. Chinese markets ended mixed, as the Hang Seng slumped 1.1% to 20784, while the Shanghai Composite rose .1%, despite disappointing import data.

Selling pressure accelerated in Europe. The CAC40 dropped 1.5%, the DAX sank 1.4%, and the FTSE lost .7%. Banking shares lost more than 3.4% as protests erupted in Greece over the proposed austerity measures, while European leaders demanded even steeper cuts.

US stocks closed lower, as the Dow fell 89 points to 12801, its largest fall in 2012. The Nasdaq closed down .8%, and the S&P 500 dropped .7% to 1343, while the VIX surged 11.6% to 20.79.

VIX Surges 11.6% as Greek Tensions Spike

LinkedIn shares soared 17.8% after beating analyst profit forecasts and raising its outlook for the year. Nuance shares slumped 13% after profits fell short of estimates.

Currencies

The Dollar rallied as the currency markets shifted into “risk off” mode. The Australian Dollar was the largest loser, dropping 1.1% to 1.0673. The Euro fell .7% to 1.3188, the Pound lost .4% to 1.5755, and the Swiss Franc dropped .5% to 1.0915. The Canadian Dollar shed .7% to 1.0018, while the Yen bucked the trend, inching up .1% to 77.59.

Economic Outlook

The US trade deficit grew to $48.8 billion, slightly larger than expected, and up from last month’s $47.1 billion deficit. Consumer confidence fell more than expected to 72.5, from last month’s reading of 75.

Stocks Gain as Greece’s Passes Austerity Bill

Equities

Asian markets began the week on an up note, encouraged by Greece’s successful passage of an austerity bill. The Nikkei rose .6% to 8999, and the Kospi gained .6% as well, led by car makers. Australia’s ASX 200 rallied .9%, the Hang Seng advanced .5%, and the Shanghai Composite closed flat.

In Europe, stocks posted moderate gains, the region’s response to Greece’s austerity bill was muted.. The FTSE climbed .9%, as Cable & Wireless Worldwide soared 37% after Vodafone revealed it is considering a takeover bid for the company. The DAX gained .7%, and the CAC40 rose .3%.

Currencies

Currency markets traded in relatively narrow ranged on Monday. The Euro eased 8 pips to 1.3190, the Pound rose .1% to 1.5771, while the Yen and Swiss Franc traded flat. The Australian Dollar posted an outsized gain of .6% to 1.0734, and the Canadian Dollar rose .3% to .9992.

Economic Outlook

Tuesday’s economic calendar will include retail sales, import prices, and business inventories. Overseas, the ZEW economic sentiment index for Germany and the Euro zone is due.