Monday, July 06, 2015

Today's Headlines

Posted by Gary .....at 3:02 PM
Bloomberg:    
  • Greece ‘48 Hours Away From Unrest’. (video) Greek Prime Minister Alexis Tsipras probably has 48 hours to resolve a standoff with creditors before civil unrest breaks out and ATMs run out of cash, hedge fund Balyasny Asset Management said. Fund managers are questioning how the International Monetary Fund and Europe’s leaders can seal a deal with Athens following the “no” vote in a Greek referendum on Sunday. Sixty-one percent of voters rejected austerity, increasing the likelihood of an exit from the euro area. “I don’t see a good resolution any time soon,” Colin Lancaster, senior managing director with Balyasny, a $9 billion fund based in Chicago, said in an e-mailed response to questions. “The big question is whether the EU adopts a strategy of waiting them out. The hope would be that the unrest leads to a unity government or change in government.”
  • ECB Tightens Collateral Terms for Greek Bank Liquidity Aid. (video) The European Central Bank made it harder for Greece’s banks to access emergency loans, adding pressure on a country whose financial system remains shuttered as it awaits political talks in Brussels. “The financial situation of the Hellenic Republic has an impact on Greek banks since the collateral they use in Emergency Liquidity Assistance relies to a significant extent on government-linked assets,” the Frankfurt-based ECB said in a statement on its website. “ELA can only be provided against sufficient collateral.”
  • Gross Sees Greece in Hurricane’s Eye as Euro Exit Odds Rise. Bill Gross, manager of the Janus Global Unconstrained Bond Fund, said Greece is in “the eye of the hurricane” and that he sees a 70 percent to 80 percent probability of a Greek exit from the euro. “I do not believe the situation really is calm,” Gross, said on Monday in a Bloomberg Television interview with Erik Schatzker, adding that he was surprised by the muted market reaction to a Greek vote on Sunday.
  • German Factory Orders Fell in May as Greece Damped Optimism. German factory orders fell in May in a sign that companies may have held back as Greece’s debt crisis cast a cloud over the euro area’s economic recovery. Orders, adjusted for seasonal swings and inflation, slid 0.2 percent after rising 2.2 percent in April, data from the Economy Ministry in Berlin showed on Monday. The typically volatile number compares with a median estimate of a 0.4 percent drop in a Bloomberg survey. 
  • China’s Push to Save Market May Add Another Victim: Brokers. China’s emergency measures to save the stock market risk creating another victim: the nation’s brokers. Securities firms will suffer the most from steps unveiled at the weekend, according to Bank of America Corp.’s head of China equity strategy David Cui. Doing their “national service” by purchasing shares to support the market may hit brokers’ earnings and balance sheets, Cui said in a note Monday.
  • Emerging Market ETFs Suffer Worst Outflows in Almost Fourth Months. Investors withdrew the most money from U.S. exchange traded funds that buy emerging-market stocks and bonds in almost four months during the week ended July 3. China and Hong Kong saw the biggest outflows. Redemptions from emerging market ETFs that invest across developing nations as well as those that target specific countries totaled $1.4 billion compared with inflows of $792.7 million in the previous week, according to Bloomberg. Stock funds lost $1.7 billion and bond funds advanced by $334.9 million. The biggest change was in China and Hong Kong, where funds shrank by $521.1 million, compared with $178.7 million of inflows the previous week. 
  • Brazil Real Drops as Levy Says Stalled Economy Sinks Tax Revenue. Brazil’s real declined for a second straight day as Finance Minister Joaquim Levy said a stalled economy is reducing tax revenue, adding to concern that the administration is struggling to pare deficits. Fiscal changes need to be carried out quickly, and measures to simplify taxes will soon be submitted to Congress, Levy told Valor Economico newspaper in a story published Monday in Sao Paulo. He has cautioned that failure to adopt belt-tightening measures may result in a lower credit rating.
  • Hong Kong Stocks Enter Correction on China, Greece Double Hit. Hong Kong stocks sank the most since 2012 amid speculation Chinese investors were shifting money out of the city’s market, and as Greece’s rejection of austerity measures spurred equity declines across Asia. Hong Kong Exchanges & Clearing Ltd. tumbled 9.6 percent at the close, the most since October 2008, after Goldman Sachs Group Inc. recommended selling the shares. Haitong International Securities Group Ltd. slid 13 percent as mainland brokerages slumped. Internet company Tencent Holdings Ltd. fell 5.5 percent, the biggest drag on the city’s equities benchmark. The Hang Seng Index dropped 3.2 percent to 25,236.28, its steepest loss since May 2012, on volume 69 percent greater than its 30-day average. The measure has declined 11 percent from its recent peak on April 28, entering a so-called correction. 
  • Europe Stocks Fall Without Panic as Investors Weigh Greek Vote. European stocks fell after Greek voters rejected creditors’ austerity demands, while a measure of volatility slid amid speculation that the resignation of Finance Minister Yanis Varoufakis will smooth further talks. The Stoxx 600 retreated 1.2 percent to 378.68 at the close of trading, after earlier losing as much as 1.6 percent.
  • Muted Greek Fallout So Far Offers Fed Little Reason for Concern. So far so good for the Federal Reserve as it surveys fallout from the Greek “no” vote. The financial chaos some predicted has yet to unfold, and the impact for now looks benign for the U.S. economy. “The main way the Fed will look at it is to say, ‘These events abroad -- do they tighten financial conditions or do they ease financial conditions?’” said Torsten Slok, chief international economist at Deutsche Bank AG in New York. “The irony is they have eased financial conditions because U.S. rates have declined.”
Wall Street Journal: 
  • Germany Stays Tough on Debt Relief for Greece. Comments come after Greek voters strongly reject creditors’ demands. Germany stood firm against debt relief for Greece the day after the country’s voters issued a resounding “no” to more austerity, signaling a possible tough fight ahead on one of the few remaining opportunities for compromise. About 61% of Greek voters strongly backed Prime Minister Alexis Tsipras’s stance against... 
ZeroHedge: 
Business Insider: 
Platts: 
Telegraph:
  • Unintentionally, the Greeks have done themselves a favour. Soon, they will be out of the euro. In citing the example of German debt relief to justify another bailout for Greece, the French economist Thomas Piketty fails to see that you cannot have debt cancellation without asset write-downs, which devaluation would deliver in the least painful way.

No comments:

Post a Comment

Subscribe to: Post Comments (Atom)