OVERNIGHT MARKETS AND NEWS
September E-mini S&Ps (ESU15 +0.39%) are up +0.32% at a 3-week high and European stocks are up +1.42% at a 1-1/2 month high after the Greek parliament approved austerity measures needed as a precondition for a third bailout. European stocks also received a boost after an official familiar with the situation said that Eurozone finance ministers agreed in principle to extend a 7 billion-euro bridge loan to Greece. European automakers led the overall market higher after European car sales last month rose at the fastest pace in 5-1/2 years. Asian stocks closed mostly higher: Japan +0.67%, Hong Kong +0.43%, China +0.46%, Taiwan -0.13%, Australia +0.59%, Singapore +0.44%, South Korea +0.73%, India +0.88%. Japan’s Nikkei Stock Index rose to a 2-1/2 week high as a rally in exporters led the overall market higher after the yen slipped to a 3-week low against the dollar.
Commodity prices are mixed. Aug crude oil (CLQ15 +1.23%) is up +0.56%. Aug gasoline (RBQ15 +1.78%) is up +1.36%. Metals prices are mixed. Aug gold (GCQ15 -0.38%) is down -0.38%. Sep copper (HGU15 +0.02%) is up +0.08%. Agricultural prices are mixed.
The dollar index (DXY00 +0.40%) is up +0.44% at a 1-1/2 month high on divergent central bank policies with the Fed expected to raise interest rates while the ECB continues with its quantitative easing program. EUR/USD (^EURUSD) is down -0.49% at a 1-1/2 month low. USD/JPY (^USDJPY) is up +0.22% at a 3-week high as a rally in world stock markets curbs the safe-haven demand for the yen.
Sep T-note prices (ZNU15 -0.26%) are down -13 ticks.
The markets will play close attention to ECB President Draghi’s press conference following today’s ECB meeting to see how the ECB will support the reopening of Greece’s shuttered banks after the Greek Parliament passed new austerity measures that are a precondition for a third bailout. European leaders must agree on some kind of bridge financing to ensure that Greece doesn’t miss a 3.5 billion-euro repayment due to the ECB on July 20. Also, a third bailout to Greece must be approved in several Eurozone parliaments, including Germany’s. Capital controls in Greece could remain in place indefinitely, and Greece’s banks, which have remained closed for more than 2 weeks, may need more liquidity to allow them to reopen.
