OVERNIGHT MARKETS AND NEWS
June E-mini S&Ps (ESM15 -0.27%) this morning are down -0.13% as they consolidate modestly below Friday’s new all-time high. European stocks are down -0.58% as no resolution is seen yet to the Greek debt crisis. The yield on the Greek 10-year bond climbed to a 2-week high of 11.40% on concern the ongoing impasse may prompt the ECB to increase the discount on the collateral Greek banks pledge in exchange for cash under its Emergency Liquidity Assistance program. That may fuel further outflow of bank deposits and force Greek Prime Minister Tsipras to choose between doing a deal with Greece’s creditors or implement capital controls in an attempt to keep Greece’s banks solvent. ECB Executive Board member Mersch said Saturday about Greece’s debt crisis that “we are in an endgame” and that “this situation is not tenable.” Stock losses were contained on increased M&A activity after Endo International Plc agreed to buy Par Pharmaceutical Holdings for $8.05 billion. Asian stocks closed mixed: Japan +0.80%, Hong Kong -0.83%, China -0.58%, Taiwan +0.28%, Australia -1.33%, Singapore -0.10%, South Korea +0.24%, India +1.33%. Japan’s Nikkei Stock Index climbed to a 2-week high on improved company earnings prospects and share buybacks from Japanese companies.
Commodity prices are mixed. Jun crude oil (CLM15 +1.29%) is up +0.90% and Jun gasoline (RBM15 unch) is down -0.31%. Metals prices are higher. Jun gold (GCM15 +0.06%) is up +0.29% at a 3-month high after Chicago Fed President Evans said the Fed should hold interest rate at current levels until early 2016 because inflation is still too far below the Fed’s target. Jul copper (HGN15 -0.32%) is down -0.31%.
The dollar index (DXY00 +0.50%) is up +0.43%. EUR/USD (^EURUSD) is down -0.30%. USD/JPY (^USDJPY)is up +0.34%.
Jun T-note prices (ZNM15 -0.10%) are down -6 ticks.
Chicago Fed President Evans, speaking at the Swedbank Global Seminar in Stockholm, said that the Fed is on a “meeting-by-meeting basis in decision making, at least in terms of the funds rate.” He added “my own projection is that it will take quite some time” for inflation to meet target; that’s why “I’m in favor of the current level accommodation to continue.”
