Market Overview

28 August 2015 16:07

Konstantin Meinhardt

Stock markets seem to recover from a massive selloff on Monday. Concerns over a slowdown in the Chinese economy led to this selloff. Since then the People's Bank of China (PBoC) injected billions of yuan into the financial system and lowered its interest rates. The question remains whether these actions will lead to the desired result, or we might see the next yuan devaluation. The situation around the interest rate hike by the Fed remains unclear. The recent drop in oil prices and a slowdown in the Chinese economy are pointing to the delay of the interest rate hike. But the U.S.
21 August 2015 15:37

Konstantin Meinhardt

Concerns over the global slowdown determined markets this week. The Chinese economy remained in focus. Today's Chinese preliminary Markit/Caixin manufacturing Purchasing Managers' Index (PMI) added to worries over the economy in China. The index decreased to 47.1 in August from 47.8 in July, missing expectations for a decline to 47.7, and hitting a 77-month low. The Chinese government will face a big challenge to boost the economy. The U.S. dollar should remain under pressure in the coming days. The Fed released its latest monetary policy meeting on Wednesday.
14 August 2015 16:05

Konstantin Meinhardt

The first interest rate hike was more in focus this week. Market participants still speculate on that the Fed starts raising its interest rate in September. But the Fed's decision seems to be more uncertain. Reasons are the U.S. economic data and this week's yuan devaluation. China's central bank reassured market participants on Thursday, saying there was no basis for further yuan devaluation. The devaluation of the yuan could mean that China's economy faces more problems than expected by market participants. China's exports dropped in July.
7 August 2015 15:09

Konstantin Meinhardt

The Greek debt crisis and the first interest rate hike remain in focus, whereby the Greek debt crisis receded a little into the background. But I think the negotiations on the third Greek bailout programme will be difficult. The European Commission hopes to reach a deal by August 20 as Athens will have to repay €3.4 billion loans to the European Central Bank on August 20. The German newspaper Bild reported yesterday that the German government doubts that a deal on a third bailout programme for Greece can be reached in August. The government believes that Greece will need another bridge loan.
17 July 2015 16:17

Konstantin Meinhardt

Greece's lenders agreed to provide the third bailout programme to Greece. The bailout programme should total about €90 billion. European Union finance ministers agreed to provide a €7 billion bridge loan to Greece until the third Greek bailout programme will be set up, and the amount of emergency funding (ELA) to Greek banks was increased by €900 million for one week The Greek parliament has approved reforms demanded by Greece's creditors in return for the third bailout programme on Wednesday.
10 July 2015 16:18

Konstantin Meinhardt

This weekend should be very important for markets. Greece presented new reform proposals on Thursday. The Eurogroup will make a decision on these proposals on Saturday, before the officials of all EU countries will meet on Sunday. French President Francois Hollande was optimistic on Greek reforms, while German government's spokesman declined to comment on Greek proposals. We already saw these kind of development. First comments are optimistic, following by more pessimistic comments.
3 July 2015 15:15

Konstantin Meinhardt

There is still no end of the Greek drama. Greeks will vote on Sunday if the Greek government should accept the proposals made by its lenders. Greek Prime Minister Alexis Tsipras said that Greek should vote "No" on Sunday to get better proposals. He also said that the vote "No" would not mean that Greece have to leave the Eurozone. Greek Finance Minister Yanis Varoufakis said on Friday that a deal between Greece and its creditors will be reached regardless of the outcome of Sunday's referendum. He noted that a deal was "more or less done".
26 June 2015 16:08

Konstantin Meinhardt

The Greek drama continues. There were several rounds of debt talks between Athens and its lenders, but there is still no deal. The procedure is the same: the Greek provides a proposal. First comments by EU officials are optimistic. But they say that they need time to check a proposal closely. Later they say that a proposal is not enough. It seems that Greece's lenders need a deal more than Greece itself. The Greek government makes some changes and wait what its creditors say. Perhaps, Athens waits for a default to start from zero.
19 June 2015 16:39

Konstantin Meinhardt

The Fed's monetary policy and the debt talks between Greece and its creditors were the main events this week. Investors hoped for signals when the Fed starts raising its interest rate. They were disappointed as the Fed Chair mentioned that the interest rate may be hiked twice this year, but she added that the hiking of the interest rate will be gradual. The timing was not mentioned. The Greek debt talks ended without any deal this week, the same results as the last week. All those involved in the debt talks said that a deal still possible.
12 June 2015 12:38

Konstantin Meinhardt

There is still no progress in the debt talks between Greece and its creditors, and the likelihood for a Greek default rises. The Greek government provided a new proposal this week, but its creditors said that the proposal is insufficient. The culmination of the debt talks was yesterday as the International Monetary Fund (IMF) technical team has left the debt talks in Brussels, saying there were "major differences". News also reported that Germany was preparing for a Greek default. The situation could only change if the Greek government accepts almost all conditions of its creditors.

Material posted here is solely for information purposes and reliance on this may lead to losses. Past performances are not a reliable indicator of future results. Please read our full disclaimer.

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