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The Breakfast Briefing
European equity markets have edged higher Wednesday, reacting with cautious optimism to the news that eurozone leaders have given Greece more time to come up with new measures to avoid crashing out of the currency union.
The leaders said that the broad outlines of such an agreement needed to be nailed down at a new summit on Sunday. As a sweetener for such a deal, they raised the possibility of some short-term financing to help Athens avoid defaulting on the European Central Bank--a move that would likely end Greece's time in the eurozone.
That said, it's debatable how long this positive tone can last given obstacles to an agreement remain high, especially as the new economic measures demanded go beyond those that were resoundingly rejected by Greek voters in a referendum last weekend.
In addition, the lead from Asia is negative as Chinese markets fell sharply Wednesday, even as Beijing scrambled to arrest a three-week stock selloff.
--Peter Nurse
Market Snapshot: FTSE 100 up 0.51%, CAC-40 up 0.60% and DAX up 0.42%. Nikkei closed Wednesday down 3.14%. Brent crude down 1.34% at $56.09. Gold up/down TKTK% at $TKTK. EUR/USD at $1.1017. Ten-year Treasury yield lower at 2.19%, Bund yield lower at 0.63%, Gilt yield lower at 1.83%.
What You May Have Missed on MoneyBeat
What Would Grexit Look Like? -- The Short Answer: Once a theoretical fear of euro-pessimists, Grexit--a Greek exit from the eurozone--may be soon upon us. The euro was designed to be an irrevocable currency; there is no procedure in its rules or treaties for a country to stop using it. So precisely what would happen is highly speculative. But let's speculate.
Why Oil's Brief Rally Is Just the Calm Before the Storm: Oil prices are back in the black Tuesday after Monday's heavy losses, but it could simply be the quiet before the storm: On Tuesday the market will be watching for developments on the Iran nuclear talks and Greece bailout negotiations, as well as U.S. oil inventory data.
Asset-Manager Profits Reach Pre-Crisis Peak, But Challenges Loom: Bull markets powered global assets under management to a record $74 trillion in 2014, an 8% increase, according to the Boston Consulting Group. It was the third consecutive year that the metric set an annual record.
Tough Times Ahead for Commodity Exporters: Times are tough for commodity producers and emerging markets. And, if anything, they're likely to get tougher still.
Global Uncertainties Lift Treasurys Appeal: Global uncertainties have stoked demand for haven debt, stalling the rising bond yield momentum over the past few months.
ECB Lifts Veil on Emergency Liquidity Assistance: The European Central Bank has lifted the veil a bit on a program that typically operates in the shadows but has gained prominence in recent months during Greece's debt drama: Emergency Liquidity Assistance, or ELA.
Rise in Positive Economic News Masks Underlying Global Problems: News coverage of the global economy improved sharply in June, but not for the right reasons, according to a report released Tuesday.
U.K. Rubber-Stamps New Bank Conduct Rules: U.K. financial regulators on Tuesday left finance professionals in no doubt about new rules designed to clean up conduct, rubber-stamping a raft of changes in a single document to give "clarity," according to Financial Conduct Authority chief Martin Wheatley.
Germany Joins Media Merger Rush -- At A Glance: A possible tie-up between Axel Springer, one of Germany's biggest publishers, and ProSiebenSat.1, a leading private broadcaster in Europe's largest economy, is a long-running corporate saga. Here's a look at the companies and what might make or break a deal.
If Greece Goes, Political Contagion Is the Bigger Risk in Europe: Whatever the odds of Greek exit from the euro were last week, they have topped 50% since Greeks voted "no" to their creditors' demands in Sunday's referendum. The question then becomes, if Greece goes, how likely is it that larger, more consequential countries will follow? A sober appraisal must conclude that the odds of a wider contagion are uncomfortably high.
UBS Names New Head of Global Equity Syndicate: UBS AG has named Brad Miller as its global head of equity capital markets syndicate, according to an internal memo reviewed by MoneyBeat. He joins the Swiss bank from Deutsche Bank AG, where he was global co-head of equity syndicate.
From The Wall Street Journal
Eurozone Sets Sunday Deadline for Greece Financing Deal: Eurozone leaders set Greece a Sunday deadline to come up with new and even-tougher economic measures if the country wants to avoid defaulting on the European Central Bank and crashing out of the currency union.
European Central Bank Holds Key to Greece's Future: A looming bond payment by Greece to the European Central Bank is emerging as the potentially decisive event in the country's attempt to stay in the euro and avoid a banking collapse.
Barclays Chief Executive Antony Jenkins to Leave Bank: Barclays on Wednesday said Chief Executive Antony Jenkins would leave the bank after its board decided that new leadership was required.
China Markets Fall Sharply Despite Fresh Help From Beijing: Chinese markets fell sharply Wednesday, even as Beijing scrambled to arrest a three-week stock selloff.
Shell Places Huge Bet on Arctic Oil Riches: Royal Dutch Shell is days away from drilling in the Arctic Ocean--betting it can find enough oil to justify the huge risks that keep almost every other competitor out of those icy waters.
George Osborne to Reveal New U.K. Tax, Spending Plans : U.K. treasury chief George Osborne is due Wednesday to provide fresh details on plans to finish the task he failed to accomplish during his first term in office: wrestling down Britain's budget deficit.
(END) Dow Jones Newswires
July 08, 2015 03:28 ET (07:28 GMT)
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