Weekly overview (June 15 – 19, 2015): Greece makes new proposal to EU leaders
The Greek Prime Minister Alexis Tsipras has made a new proposal to German Chancellor Angela Merkel, French President Francois Hollande, and EU Commission President Jean-Claude Juncker, in the hope of reaching an agreement between his country and its foreign lenders.
A definitive decision on Greece’s future is expected from an emergency summit of Eurozone leaders later today.
After foreign ministers failed to reach an agreement last week, now all interested parties are hoping for a positive outcome. Financial markets too were closely monitoring the crisis, with all market movements being based on speculations and comments about Greece’s future. The EUGERMANY30 lost 1.53% during the past week while the EUFRANCE40 fell 2.03%. A weekly decline was also registered by both the EUSPAIN35 and EUITALY40, which wiped off 0.62% and 1.15% off their values, respectively.
In the US, market participants were also closely monitoring the situation with Greece, with last Wednesday’s FOMC meeting (at which interest rates were left unchanged) giving clear indications that there will be an increase by the end of the year, but most probably just once. The main US stock benchmarks reacted positively to the Fed’s plans and, in contrast to European indices, ended the period on green territory – all of them added about 1% to their values.
Slowing the plan for a US interest rate hike definitely prompted speculators to sell dollars for other major currencies. The most popular EUR/USD pair was up 92 pips, the GBP/USD added over 310 pips to its value, and the AUD/USD edged up 36 pips.
Metals continued to be traded in a narrow range, as was the case during the last few weeks, with both gold and silver finding support from buyers and scoring a ‘green’ week. XAU/USD closed at $1,201 per ounce, or a 1.65% rise, while XAGUSD was up 1.06% to close the week at $16.12 per ounce.
Besides the complicated situation with Greece, which is definitely not only the event of the week but the whole year, over the next few days, we will be following the financial statements by American companies Bed Bath & Beyond (BBBY), Monsanto (MON), Micron Technology (MU), Blackberry (BBRY), and Nike (NKE).