Greece gets a third bailout while US economy lifts

Share Markets:

The US stockmarket gained ground on Friday night following softness in European stocks.

The US stockmarket benefited from upbeat US economic data and news Greece would receive a third bailout programme.

The Dow and the S&P 500 rose 0.4% and the Nadaq was up 0.3% for the session. 

Interest Rates: 

US government bond yields were little changed on Friday night, lifting slightly as upbeat US economic data left expectations of Fed tightening intact.

German bond yields rose following the release of strong US economic data.

The move was limited given Greece voted for a new bailout programme, which saw peripheral bond yields fall.

Foreign Exchange:

The US dollar gained ground against the major currencies, following the release of better than expected US economic data.

The Euro retreated, with EUR/USD falling from a high of 1.1189, to trade at 1.1115 at the time of writing.

Sterling lifted versus the USD, from 1.5589 early Friday evening, to a high of 1.5667 early this morning with renewed talk about a UK interest rate hike boosting the currency.

The Chinese yuan stabilised on Friday, following its devaluation through the week.

PBOC Chief Economist Ma said over the weekend "In the future, even if the central bank needed to intervene in the market, it may be in either direction."

The Aussie dollar strengthened, with AUD/USD rising from 0.7355 on Friday afternoon to a high of 0.7398 late Friday night.

The New Zealand dollar weakened against the Aussie, with AUD/NZD briefly rising above 1.1304 on Friday evening, although it is trading at 1.1275 at the time of writing.

Commodities:

Commodity prices were mixed with the copper price easing further amid ongoing concerns about demand from China, while the oil price ground higher.

Australia:

There was no local data to report from Friday.

Europe:

Belgium Finance Minister van Overtveldt said an agreement had been reached on a Memorandum of Understanding for a third bailout programme for Greece.

The bailout will be worth up to €85.5bn.

German GDP growth in Q2 was marginally softer than consensus expectations, rising 0.4% instead of 0.5%.

However, growth still improved from 0.3% in Q1. In the year to Q2, non-seasonally adjusted GDP grew 1.6%, picking up from a revised 1.2%.

Annual growth was also marginally firmer than consensus forecasts for 1.5% growth.

Eurozone also marginally missed consensus expectations, rising 0.3% in Q2 (compared to expectations for a 0.4% increase).

This followed a 0.4% increase in Q1. For the year to Q2, Eurozone GDP rose 1.2%, up from 1.0% in the year to Q1.

Eurozone CPI rose 0.2% in the year to July, which was unchanged from the 0.2% pace in the year to June. Core CPI rose 1.0% in the year to July, also unchanged from the 1.0% lift in the year to June.

New Zealand:

Retail sales excluding inflation missed consensus forecasts, rising 0.1% in Q2 (consensus expectations centred on a 0.5% increase).

This was down from a downwardly revised increase of 2.3% in Q1 (previously reported as a 2.7% lift).

United Kingdom:

Construction output gained by a smaller than expected 0.9% in June, after falling by 1.0% in May. For the year to June, construction output has increased 2.6%, up from 2.1% in the year to June.

United States:

Industrial production beat consensus expectations, rising 0.6% in July, after rising 0.1% in June.

Capacity utilisation rose to 78.0 in July, from a downwardly revised 77.7% in June.

Producer prices rose 0.2% in July, after rising 0.4% in June. For the year to July, producer prices have declined 0.8%, up from a fall of 0.7% in the year to June.



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