European markets fall as Greece states demands from creditors are unacceptable – Binary Options Daily Review

Markets Report

Friday 5th June 2015

Prepared by MarketsWorld Binary Options Analyst

Global Markets

Market Index Closing Level Move on day Intraday Market Range
CAC 4,987.13 – 47.04 4,916.45 – 5,044.75
DAX 11,340.60 – 79.02 11,187.40 – 11,449.70
Dow Jones 17,905.58 – 170.69 17,876.90 – 18,087.20
FTSE 6,859.24 – 91.22 6,838.95 – 6,950.46
IBEX 11,146.10 – 121.50 11,070.00 – 11,292.70


Closing Markets Summary

Dow Jones

US markets closed with solidly lower on Thursday, weighed down in part by fresh Greek drama and US economic reports that helped make an interest-rate hike this year look more likely. In the ongoing Greek crisis, the debt-laden country told the International Monetary Fund that it plans on bundling four loan repayments due in June, with the first due Friday, into one payment for June 30. US stocks turned roughly flat after the IMF’s managing director, Christine Lagarde, said the Federal Reserve should hold off on raising rates until next year, arguing that moving too soon could stall the economy. But the recovery didn’t last. In US economic news, productivity in the first quarter fell by a revised 3.1% annual pace, roughly matching forecasts. Weekly jobless claims to were roughly in line with forecasts at 276,000. Thursday’s economic readings came ahead of Friday’s monthly jobs report, a major indicator for the Fed as the central bank decides when to raise rates. In company news J.M. Smucker Co. closed down 3.8% for one of the biggest drops among S&P 500 stocks as earnings came in below expectations. Wynn Resorts Ltd. climbed 7.2% for the S&P’s biggest gain, as Credit Suisse analysts reported signs of improvement in Macau casino traffic. Dish Network Corp. jumped 4.9% following a report the satellite-TV provider is in talks to merge with wireless carrier T-Mobile US Inc. T-Mobile closed up 2.6%. The S&P 500 dropped 18.23 points to close at 2,095.84, with materials and energy stocks leading losses. The Dow dropped 170.69 points to close at 17,905.58 and the Nasdaq Composite dropped 40.11 points to close at 5,059.12.

Europe European markets closed lower on Thursday as Greece described demands from its creditors to reach a deal as unacceptable. Greek Prime Minister Alexis Tsipras vowed on Thursday to never “surrender” to creditors, adding that the country’s plans formed the only “realistic proposals on the table”. Greece has reportedly said it would make the €300m payment due to the IMF on Friday, but cash is running out with total repayments for June about €1.25 billion. Also adding to market nerves was comments from ECB president Mario Draghi who said that bond markets should get used to volatility. The yield on the benchmark German 10-year bond reached 0.99%, its highest level since September, before erasing Thursday’s rise and falling back to 0.87%. In company news, Deutsche Telekom AG rose amid media reports that T-Mobile US, which is owned by the German company, is in merger talks with Dish Network Corp. Syngenta rallied after reports that BASF is considering a bid for the company. Johnson Matthey dropped with analysts pointing to a sharp increase in debt due to higher working capital, as the company posted a better-than-expected 22% rise in fiscal 2015 pre-tax profit to £495.8m. On regional markets the CAC closed down 47.04 points at 4,987.13, the DAX closed down 79.02 points at 11,340.60 and the IBEX closed down 121.50 points at 11,146.10.

The FTSE moved lower on Thursday on the back of volatility in sovereign debt markets and continued lack of progress on the Greek debt situation. The yield on 10-year German government debt fell back by seven basis points to 0.83% following two days of sharp rises – the largest two-day rise since 1998 unsettling some investors. On Wednesday, Dutch and French 10-year bond yields jumped by 16 and 15 basis points respectively. Greece is due to settle a €330m tranche of debt falling due on Friday to IMF, instead of opting to defer the payments to the end of the month, according to Market News International. Closer to home the Bank of England’s Monetary Policy Committee maintained its benchmark policy rate at 0.50% and the size of its asset purchase programme unchanged at £375 billion. On the company front Royal Mail shares were lower as Chancellor George Osborne confirmed the government would sell its remaining 30% stake in the postal delivery firm to help pay down the deficit. Kingfisher was higher following an upgrade out of Bank of America-Merrill Lynch to neutral from underperform. Low-cost airline easyJet said it carried almost 6.5m passengers last month, up 7.2% from 6.05m in May 2014. The load factor, which is a gauge of how many seats were actually occupied by passengers on flights, rose 2.2 percentage points to 91.6% from May 2014. Platinum and palladium refiner Johnson Matthey posted a 22% rise in fiscal 2015 pre-tax profit to £495.8m, boosted by the £69.7m sale of the Gold and Silver Refining business in March 2015. The FTSE finished the day down 91.22 points at 6,859.24.


Economic News Expected Today


Type Period Forecast Previous Importance
Unemployment Rate May 5.4% 5.4% High
Non Farm Employment Change May 226K 223K Medium
Change in Private Payrolls May 203K 213K Medium
Change in Manufacturing Payrolls May 5K 1K Medium
Average Hourly Earnings May 0.2% m/m 0.1% m/m Medium
Participation Rate May 62.8% 62.8% Medium
Two Month Payroll Net Revision May -39K Medium
FOMC Member William Dudley Speaks June Medium


Economic News Expected Today

EU  Eurozone

Type Period Forecast Previous Importance
Factory Orders (Germany) April 0.6% m/m; -0.3% y/y 0.9% m/m; 1.9% y/y Medium
GDP Revised (Eurozone) Q1 0.4% q/q; 1.0% y/y 0.4% q/q; 1.0% y/y Medium
Household Consumption Q1 0.4% q/q Medium


Economic News Expected Today

UK United Kingdom

Type Period Forecast Previous Importance
Consumer Inflation Expectations Q2 1.9% Medium


Other Global Economic Data Expected

Type Period Forecast Previous Importance
Foreign Currency Reserves (Switzerland) May Fr521.9 billion Medium
Unemployment Rate (Canada) May 6.8% 6.8% High
Employment Change (Canada) May 10.2K -19.7K High
Full Time Employment Change (Canada) May 46.9K Medium
Part Time Employment Change (Canada) May -66.5K Medium
Labor Productivity (Canada) Q1 0.2% q/q -0.1% q/q Medium


Economic News Round Up MarketsWorld Bars
The number of people who filed for unemployment assistance in the US last week fell more than expected, the US Department of Labor reported that the number of individuals filing for initial jobless benefits in the week ending May 30 fell by 8,000 to a seasonally adjusted 276,000 from the previous week’s revised total of 284,000. Forecasts were for initial jobless claims to fall by 5,000 to 279,000 last week. Continuing jobless claims in the week ended May 23 fell to 2.196M from 2.226M in the previous week. Forecasts were for continuing claims to decline to 2.208M. The four-week moving average was 274,750, an increase of 4,750 from the previous week’s total of 272,000. Unit labor costs in the US rose in the last quarter, the Bureau of Labor Statistics reported that US unit labor costs rose to a seasonally adjusted 6.7%, from 5.0% in the previous quarter. US unit labor costs were forecast to rise to 5.9% in the last quarter. US non-farm productivity fell in the last quarter, the Bureau of Labor Statistics reported that US non-farm productivity fell to a seasonally adjusted -3.1%, from -1.9% in the previous quarter. US non-farm productivity was forecast to fall -2.9% in the last quarter. The Bank of England kept its benchmark interest rate unchanged at 0.50% in June and also announced no change to its asset purchase facility program of £375 billion. The minutes of the meeting of the central bank’s monetary policy committee will be published on Wednesday, June 17. The rate of unemployment in France fell last month, INSEE reported that French Unemployment Rate fell to 10.3%, from 10.4% in the previous month. French Unemployment Rate was forecast to remain unchanged at 10.4% last month.

Canada’s Ivey PMI rose at the fastest rate in 19 months in May, the Richard Ivey School of Business reported that its PMI rose to 62.3 last month from a reading of 58.2 in April. Forecasts were for the index to fall to 55.5 in May.

Retail sales in Australia remained unchanged last month, the Australian Bureau of Statistics reported that Australian retail sales remained unchanged at a seasonally adjusted 0.0%, from 0.3% in the previous month. Australian retail sales were forecast to rise 0.4% last month.


Forex Round Up MarketsWorld Bars
The Dollar was steady against a basket of other major currencies on Thursday, after data showed that he number of people who filed for unemployment assistance in the US last week fell more than forecast as investors waited on Friday’s employment report. The number of individuals filing for initial jobless benefits in the week ending May 30 declined by 8,000 to 276,000 from the previous week’s revised total of 284,000. The euro strengthened earlier as German 10-year bund yields jumped to their highest level since September, narrowing the gap with their US counterparts. However investors remained cautious after talks between Greek Prime Minister Alexis Tsipras and European Commission President Jean-Claude Juncker in Brussels late Wednesday ended without an agreement. The EUR/USD pulled away from two-and-a-half week highs of $1.1380 to settle at $1.1263, down 0.10% for the day.GBP/USD edged up 0.08% to $1.5353 after the Bank of England held the benchmark interest rate at 0.50% and the stock of asset purchases at £375 billion, both as forecast. The Yen was lower, with USD/JPY up 0.15% to ¥124.44 and the USD/CHF held steady at Fr0.9345.The Australian and New Zealand dollars were weaker with the AUD/USD down 1.43% to $0.7676 and the NZD/USD was down 0.34% to $0.7128. The USD/CAD rose 0.33% to trade at CAD$1.2491 even after Canada’s Richard Ivey School of Business said its purchasing managers’ index rose to a 19-month high of 62.3 in May. The US Dollar Index was steady at 95.41.


Commodities News
Commodity Round Up MarketsWorld Bars
Gold futures settled at a nearly five-week low on Thursday, with the price dropping below the support level of $1,180 per ounce after data showed the number of workers making first-time claims for jobless benefits fell again. August gold was down $9.60 at $1,175.30 per ounce. July silver was down $0.365 at $16.115 per ounce.Oil futures fell for a second straight session on Thursday as traders braced for developments from a key meeting of the Organization of the Petroleum Exporting Countries. The highly anticipated meeting isn’t expected to lead to easing of a glut of global-crude supplies or take into account the prospect of growing output from Iran, but traders will be focused on the news to try and gain clues on oil future’s next move after losing nearly half its value since its peak in 2014. West Texas Intermediate July crude lost $1.64 to settle at $58 per barrel. Brent crude for July delivery lost $1.77 to settle at $62.03 per barrel.


The MarketsWorld Overview MarketsWorld Bars
US job-creation bounced back in April with an addition of 223,000 jobs, following March’s disappointing revised release of 85,000. The unemployment rate fell to 5.4% the lowest since May 2008 and down from 5.5% in March. Wage growth accelerated at a slower pace than expected, edging up 0.1% in average hourly earnings compared to a rise of 0.2% in March. The US labor market is expected to grow by 223,000 and the unemployment rate is expected to remain unchanged at 5.4%.
For Binary Options Trading, monitor the Dollar.




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