OVERNIGHT MARKETS AND NEWS
September E-mini S&Ps (ESU15 -1.01%) are down sharply by -1.12% at a 1-1/2 month low and European stocks are down-3.75% at a 1-week low on concern Greece will be forced to leave the Eurozone. The 10-year German bund yield sank to a 3-1/2 week low of 0.705% on increased safe-haven demand for government bonds from the Greek turmoil. Greece closed banks until at least July 6 and imposed capital controls in an attempt to avert a run on its banks. Trading on the Athens Stock Exchange will be closed as well until Jul 6. The move follows a breakdown of talks Friday between Greece and its creditors and Greek Prime Minister Tsipras’s surprise announcement that he will put creditors’ demands up for a referendum to the Greek people to vote on July 5. The ECB on Sunday froze the level of emergency funds available to Greek banks at Friday’s level of 89 billion euros. Asian stocks closed sharply lower: Japan -2.88%, Hong Kong -2.61%, China -3.34%, Taiwan -6.73%, Australia -2.23%, Singapore -1.23%, South Korea -1.27%, India -0.60%. China’s Shanghai Composite dropped % to a 2-3/4 month low, despite the cut in interest rates by the PBOC on Saturday for the fourth time since Nov.
Commodity prices are mixed. Aug crude oil (CLQ15 -2.23%) is down -2.38% at a 3-week low, Aug gasoline (RBQ15 -1.31%) is down -1.66%. Metals prices are mixed. Aug gold (GCQ15 +0.40%) is up +0.31%. Jul copper (HGN15 -0.55%) is down -0.81. Agricultural prices are higher with Jul wheat up +0.53% at a 5-3/4 month high.
The dollar index (DXY00 +0.16%) is up +0.10% at a 3-week high. EUR/USD (^EURUSD) is down -0.46% at a 3-1/2 week low. USD/JPY (^USDJPY) is down -0.82% at a 1-month low as the plunge in global equity markets boosts safe-haven demand for the yen.
Sep T-note prices (ZNU15 +0.75%) are up +1-05/32 points at a 3-1/2 week high.
The PBOC cut interest rates for the fourth time since Nov on Saturday when they lowered the 1-year lending rate by -25 bp to 4.85% and the 1-year deposit rate by 25 bp to 2.00%, and said reserve ratios for some lenders including city commercial and rural commercial banks will be cut by 50 bp.
