- Israel Mobilizes 20,000 Troops for Possible Gaza Invasion. Israel is mobilizing 20,000 soldiers for a possible ground invasion of the Gaza Strip to halt rocket bombardments on its south, as regional and world leaders appealed for an end to the violence. The Palestinian death toll from three days of stepped-up Israeli air strikes climbed past 80. “Where is this leading, is it leading to a ground force incursion? I can’t confirm that,” Israel army spokesman Lieutenant-Colonel Peter Lerner said today in a phone briefing. “I can confirm we are making all the necessary preparations to be ready for that.” Earlier this week, the military was authorized to call up as many as 40,000 reserve troops.
- IMF Says Spain Needs to Raise Taxes After Election-Year Cuts. Spanish Prime Minister Mariano Rajoy will have to take action to increase government revenue to compensate for the cost of tax cuts announced last month, the International Monetary Fund said. “What we’ve seen so far is revenue losing,” James Daniel, head of the IMF’s Spain mission, said during a telephone conference from Washington today. “That will need to be compensated by further measures in the future.”
- VIX Jumps as Portugal Bank Concern Fuels Stock Losses. A measure of European stock-market volatility rose the most in four months and the U.S. VIX jumped as concern over Portugal’s banks spurred a rout in equities. Europe’s VStoxx Index increased 12 percent to 16.85 as of 3:27 p.m. in London, heading for the biggest advance since March. The Chicago Board Options Exchange Volatility Index climbed 7.8 percent to 12.56. The gauges track the cost of options and are considered measures of investor fear. Both are up more than 22 percent this week. “This could just be a catalyst for a market correction,” Andrew Wilkinson, chief market analyst at Interactive Brokers LLC, said in a phone interview from Greenwich, Connecticut. “You’d have to see a sustained period of selling, back-to-back losses of 1 to 1.5 percent into next week, before people will start piling on the protection.”
- French Stocks Seen Extending Losses on Economy Concern. Options traders are betting declines in French stocks aren’t over as concern grows that President Francois Hollande will fail to revive the economy. Bearish contracts on the benchmark CAC 40 Index (CAC) cost the most since April 2013 relative to those on the Euro Stoxx 50 Index, data compiled by Bloomberg show. Puts protecting against a 3.7 percent decline in the gauge are the most owned. French shares have fallen 6.2 percent to their lowest level since March from their high last month, compared with the 4.6 percent decline for the euro-area index.Germany Expels U.S. Intelligence Envoy Amid Spying Spat
- Germany Expels U.S. Intelligence Envoy Amid Spying Spat. German Chancellor Angela Merkel’s government expelled the top U.S. intelligence official in Berlin over allegations of espionage, escalating a conflict that one of her aides said has caused “grave” political harm. The U.S. embassy official was asked to leave Germany after the Federal Prosecutor began investigating spying practices, according to the statement from Merkel’s Chancellery today.
- Greece Cites Market Conditions as Bond Sale Misses Target. Portugal’s bonds led a selloff in securities from the region’s so-called periphery nations this week on instability in that nation’s banks. Greece’s transaction went ahead “despite very unfavorable conditions in international markets and especially in periphery, today and yesterday,” the Finance Ministry in Athens said in a statement. “It points at a fragile position of the issuer in terms of being able to secure a reliable market access,” said Gianluca Ziglio, executive director of fixed-income research at Sunrise Brokers LLP in London. Greece had to “accept halving its initial issuance target despite being a syndicated offer, and also had to accept a higher guidance than was initially thought,” he said.
- European Stocks Drop as Portugal, Italy Banks Fall. European stocks fell for a fifth day as a gauge of lenders declined to its lowest level this year and equities in the so-called peripheral nations tumbled. Banks in Portugal, Italy and Spain sank, sending an industry gauge to the fourth slump in five days. Fugro NV plunged the most since 2003 after predicting a drop in profit margin and a write-off of as much as 350 million euros ($477 million). Gerresheimer AG and Tryg A/S climbed after posting quarterly earnings that exceeded analysts’ estimates. The Stoxx Europe 600 Index fell 1.1 percent to 336.37 at the close of trading in London, extending its five-day decline to 3.6 percent, the most since March. Investors are weighing valuations near the highest levels since 2009, while concern is rising over signs that the euro-area recovery remains fragile. “We’ve seen a lot of money go into the periphery earlier this year, and banks have a fairly big weighting in those regions,” said Veronika Pechlaner, who helps oversee $2.3 billion at Jersey, Channel Islands-based Ashburton Ltd. “As investors revisit their positions, sentiment can turn quite quickly. A gauge of lenders in the region sank 1.7 percent, falling the second most among 19 industry groups. Banco Espirito Santo SA plunged 17 percent to 50.9 euro cents before the Portuguese securities regulator suspended the shares.
- Gold Reaches 16-Week High as Portugal Spur Haven Buying. On the Comex, gold futures for August delivery rose 1.1 percent to $1,338.80 an ounce at 12:02 p.m. in New York, after touching $1,346.80, the highest for a most-active contract since March 19. Trading was 50 percent higher than the 100-day average for this time, according to data compiled by Bloomberg.
- China Said to Probe Alleged Bank of China Money Launder. China’s central bank and currency regulator are investigating a state media report that alleged Bank of China Ltd. broke rules on transferring money overseas, two government officials familiar with the matter said.
- China’s Copper Imports Fall as Financing Deals Unwind. China’s copper imports dropped to the lowest since April last year as demand for the metal as collateral to obtain credit eased amid a probe at Qingdao Port. Inbound shipments of unwrought copper and copper products fell to 350,000 tons in June, a 7.9 percent decline from the previous month, according to data released by customs today. Weaker demand from China, the world’s biggest user, may weigh on benchmark copper futures in London, which have retreated 3.3 percent this year. Prices will slide during the next six to 12 months as production costs drop, China’s property sector weakens and commodity financing unwinds following the investigation at Qingdao, Goldman Sachs Group Inc. said July 8.
- Chicago Fed Calls for Curbs on High-Frequency Trading. The Federal Reserve Bank of Chicago entered the debate over whether financial markets are fair, proposing limits on high-frequency trading firms and incentives to bring more buying and selling into public view.
CNBC:
- Here's what's happening in Portugal. (video)
Business Insider:
Reuters:
- Carbon import tariffs could torpedo global climate deal- EU official. A move by the European Union to impose duties on carbon-intensive imports would scupper the chances of striking a global agreement to tackle climate change next year, the bloc's top climate official said on Thursday. European leaders have agreed to decide by October whether to set a 2030 goal to cut carbon emissions as the EU contribution to a global pact to tackle climate change, due to be signed in Paris in late 2015 and take effect from 2020.
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