US dollar weakens as Greece requests new bailout - 9.7.2015

US stocks fell on Wednesday as investors were concerned over unresolved Greek debt crisis and turmoil in China’s markets. Trading on the New York Stock Exchange was halted for three-and-a-half hours due to a technical glitch. The dollar weakened and the ICE US Dollar Index, a measure of the dollar’s strength against a basket of six currencies, was down 0.24%. S&P 500 lost 1.7%. Fed June minutes released on Wednesday showed policy makers were concerned about Greek situation and slowing growth in China, and only one of the 10 FOMC voting members was ready to hike rates in June, but that official expressed a willingness to wait another meeting or two. Investors didn’t react much to minutes, indicating the markets had already priced in the dovish stance of the central bank. Fed Chairwoman Janet Yellen’s speech on economy tomorrow is the next big event with a potential to move markets. Today at 13:30 CET Initial Jobless Claims and Continuing Claims will be released in US. The tentative outlook is positive for the dollar. At 15:00 CET Fed Governor Lael Brainard will speak on regulatory reforms in Washington, DC. At 18:00 Fed Governor Esther George will speak on monetary policy and economic outlook in Oklahoma.

European stocks ended higher on Wednesday after four days of losses as Greece applied for a third bailout loan. Euro rose, recording its best performance since June 29. The Stoxx Europe 600 edged up 0.04%, Germany’s DAX 30 rose 0.7%, and France’s CAC 40 gained 0.8%. Greek Prime Minister Alexis Tsipras requested a three-year bailout program from the European Stability Mechanism. He said Athens will submit a detailed economic reform proposal in the next few days. Provided that the European Commission, the International Monetary Fund and the European Central Bank approve, Eurogroup finance ministers will meet on Saturday to recommend a loan, and some emergency bridging finance. And on Sunday 28 leaders of European Union would meet to consider the proposal. In economic data, German May trade balance and current account were lower than expected, no other economic data are expected today in euro-zone. At 12:00 CET Bank of England rate decision will be announced. The central bank is expected to leave the monetary policy unchanged.

Nikkei rose 0.6% today as yen weakened after the selloff in China’s markets abated. Machinery orders hit a 7-year high in May. Tomorrow at 0:50 CET June Producer Price Index will be published in Japan. The tentative outlook is negative. At 6:00 CET consumer confidence index for June will be released. The tentative outlook is positive.

China’s stock markets are rebounding today after China Securities Regulatory Commission on Wednesday banned holders of more than 5 percent of a company's stock from selling for the next six months. An official report also indicated that inflation edged up 1.4% in June.

Oil prices are rising today after falling on Wednesday as weekly US inventories rose unexpectedly. The outlook is still bearish with the Organization of the Petroleum Exporting Countries and Russia producing at near record levels and the expected increase in Iranian exports after a nuclear deal poised to exacerbate the global oversupply.

Gold prices rebounded on Wednesday after hitting four-month low previous day as weaker US dollar and equities boosted heaven demand. Copper prices also rose.