Market's evolution 29 of June to 03 of July 2015

Market's evolution 29 of June to 03 of July 2015


The focus last week was Greece again, who rejected the new proposal from the Eurogroup of taking adjustment measures as a condition for the disbursement of the last stretch of the bailout program for the country. Alexis Tsipras decided to carry out a referendum in the Greek country, and after the European refusal to extend the rescue until Sunday, it was inevitable to establish a playpen in Greece, restricting cash withdrawals.
Both banks and stock exchanges remained closed throughout the week and the government established capital controls in the country.

On Tuesday, Greece default by 1.550 million euros to the IMF and today has been announced the resignation of the Greek finance minister instead the results of the referendum. We will be looking forward to the meetings that will take place in Greece during this week and the emergency summit called for tomorrow, as well as the statements of political leaders in the Eurozone.

In the US, the new statements from the Fed suggest that it is very likely that the rate hike is going to take place this year. Macroeconomic data released in recent days, showed a rise in employment and consumer confidence, while average hourly earnings have been worsened.

China highlighted a cut in the interest rates (for the fourth time this year) by 25 basis points.

Major European indexes finished the week with widespread falls, in the case of the Spanish IBEX 35 to 10,779 (-5.21%), and the Eurostoxx50 closed at 3,441 level (-4.96%). Drops were less notable in American and Asian indices; the S & P 500 ended at 2,076 (-1.18%) and Nikkei225 at 20,539 (-0.80%).

The trend throughout the week in the European bond market has been affected by the uncertainty of the outcome in the referendum on Sunday. As a result, risk premiums of peripheral countries increased by 55 bp; in the case of Spain and Italy, up to 200 bp. Again, we expect a "flight to quality" to the German bund.

The default to the IMF and the victory of "NO" to the measures proposed by the Eurogroup in the Greek referendum adjustment has caused over the last week that the US lost value against the dollar by moving the exchange rate on the 1.11 EUR / USD .

The Brent barrel fell to 60 USD/Brent, while gold  price has been stable close to the 1,167 EUR/Onz.