US stocks closed higher on Monday as market sentiment was bolstered by an agreement for a third bailout program between Greece and its creditors. S&P 500 closed 1.1% higher with all 10 main sectors finishing with gains. The dollar strengthened, with US Dollar Index, a gauge of the dollar’s strength against six other currencies, rising 0.8% to 96.7520. As the fears of imminent Greek exit from euro-zone subsided, investors will be focusing on earnings reports and upcoming data on inflation this week. US companies are expected to record 2.9% fall in quarterly earnings, which may negatively impact stock prices given historically high stock valuations. The natural gas processor MarkWest Energy Partners LP (NYSE:MWE) jumped 14% after MPLX LP said it will buy the company for about $15.8 billion, creating a master-limited partnership giant with natural-gas and crude-oil presences. Shares of Microsoft Corp (NASDAQ:MSFT) rose 2.1% after the company announced plans to launch Windows 10 operating system on July 29. About 5.9 billion shares traded on US exchanges, 14.5% lower than the month-to-date average volume. Today at 13:30 CET June advance retail sales and import price index will be released in US. The tentative outlook is negative for the dollar. At 15:00 CET June business inventories will be released.
European stocks rose sharply as Greece reached an agreement with euro-zone creditors that would allow to start third bailout loan negotiation after national parliaments approve the deal. The STOXX 600 rose 2%, Germany’s DAX 30 gained 1.5% and France’s CAC 40 jumped 1.9%. The euro weakened. Greek Prime Minister Alexis Tsipras agreed to austerity measures demanded by creditors in return for cash. Greece now needs to pass laws by July 15 to raise sales tax, cut pensions, change the bankruptcy code and make spending cuts automatic if the budget misses its target, after which the formal negotiations about a three-year bailout through euro-zone’s emergency fund can begin. Tsipras also agreed to Germany’s demands to transfer as much as 50 billion euros of Greek state assets to a trust fund beyond government reach. The trust will hold the state assets to be sold off with proceeds going directly to pay down debt. In return Tsipras wanted a stronger commitment by the creditors to restructure Greek debt to make it sustainable in the medium-term. Today at 10:00 CET July ZEW survey results for Germany and euro-zone will come out. At 9:30 CET inflation data will be released in UK. The tentative outlook is positive for the pound.
Nikkei 225 rose 1.5% today as yen weakened. Tomorrow at 01:00 CET Bank of Japan monetary policy statement will be released and at 04:00 CET Governor Kuroda will give a press conference.
Chinese stocks are falling with trading of 795 mainland firms, nearly a third of companies listed, still halted. Tomorrow at 03:00 CET second quarter GDP, June industrial production and fixed asset investment year-to-date data will be released in China. The tentative outlook is negative.
Oil prices are falling today on fears exports from Iran will add to global glut as a nuclear deal was reached between Iran and six global powers. Gold prices fell on Monday for a third straight session as safe haven demand for the metal fell after the imminent Greek exit from euro-zone was averted and the US dollar strengthened.