Markets rebound on news Greek deal is being drafted - 28.5.2015

US stocks rebounded on Wednesday as investor optimism was buoyed by reports that Greece and Eurogroup members are working on a staff level agreement that would unlock the bailout funds for the country. The reports were refuted later. The S&P 500 closed 0.9% higher, recovering most of the previous session losses prompted by investor worries that the Federal Reserve could raise interest rates sooner as recent positive reports indicated US economy is accelerating. The gains were led by a rally in tech stocks which propelled Nasdaq to its first record close since April 24. Broadcom surged 21.8 % on news the chipmaker was in talks to be acquired by Avago Technologies. Avago jumped 7.76 percent. Gilead Sciences rose 2.45 % and led gains on the S&P health index. The trading volume at 5.8 billion shares was about 6 % below the monthly average. The dollar advanced against most of its rivals. The weekly Mortgage Index of Mortgage Bankers’ Association fell 1.6%. Today at 13:30 CET Initial Jobless Claims and Continuing Claims will be released in US. The tentative outlook is positive. At 15:00 CET April Pending Home Sales will be released. The tentative outlook is negative.

European stocks rallied on Wednesday after comments by Greece’s Prime Minister Alexis Tsipras that Athens and its creditors are on the final stretch toward a deal. Bloomberg reported that a draft for a technical-level agreement was being written. The Stoxx Europe 600 closed up 1.3%, breaking a three-session losing streak. Athex Composite finished higher 2.6%, Germany’s DAX rose 1.3%. Later European Commission Vice President Valdis Dombrovskis said Greece and its international creditors were not yet at the point of drafting an agreement. Euro advanced on news about impending deal between Greece and its creditors. The GfK report indicated German consumer sentiment is set to increase in June. G7 ministers and central bank heads met in Dresden to discuss global growth issues. It is expected that the Greek crisis, which is not on the official agenda for the three-day meeting, will be discussed on the sidelines. Today at 10:00 CET May economic, consumer and business confidence indexes will be published in euro-zone. The tentative outlook is positive for euro.

Nikkei rose 0.4% today as the dollar hit 124.30 yen on expectations the Federal Reserve will raise interest rates later this year. The Nikkei has gained 5 % during the 10-day winning streak as investors expect exporters' earnings will rise as yen grows weaker. Automakers advanced, with Toyota Motor Corp and Honda Motor Co rising 1.7 percent, and Nissan Motor Co closing up 1.4 percent. The minutes from Bank of Japan April policy meeting showed that policy makers were doubtful that the Japanese economy would hit the central bank’s inflation and growth forecasts.

Oil prices fell on Wednesday ahead of weekly US inventory data which will be released today at 16:00 CET. Traders also looked for comments from key oil producers ahead of the June 5 meeting of the Organization of the Petroleum Exporting Countries scheduled in Vienna. It is expected that the cartel will not reduce the output as Saudi Arabia, OPEC’s largest oil producer, is reluctant to cut production as it wants to keep its market share.

Gold prices fell for a fourth session on the back of stronger dollar.