26/07/2017 - Greece Has Successful Bond Launch

EUR

Greece has made a successful return to the financial markets yesterday, spurring some  confidence in the embattled economy. Selling €3bn worth of its new five-year Government bond, at an interest rate of 4.625%, lower than the 4.95% that Greece last sold five-year bonds for, in 2014.
  
A government official says the sale was an “absolute success” also adding that  “It reaffirms the positive trajectory of the Greek economy which is making steady steps to exiting crisis and bailout programmes.” There is already talk of further sales in the months ahead.
 
Greece’s current bailout programme expires in summer 2018. Athens is desperate to avoid a fourth rescue deal, so is hoping that yesterday’s deal could be the first step towards gaining further market access.
 
The IMF has reportedly warned The ECB against a premature end to its current monetary stimulus, stating that there need to be a better indication of a sustained economic recovery and stable inflation rate heading towards its 2% target. The Eurozone economy has been one of the best performing economies this year with unemployment falling to four year lows and improving confidence. The IMF also upgraded its Eurozone growth forecast for this year to 1.9% from 1.4% yesterday.
 
Demand for the Euro continued to be underpinned by expectations that the European Central Bank is moving closer to tapering its bond-buying program.

USD

Doubts over the Feds plans for a third rate hike this year have fed into recent dollar weakness. Investors also remained focused on the investigation into alleged links between U.S. President Donald Trump’s administration and Russia in last year’s election.
 
On Monday, Jared Kushner, Trump’s son-in-law and a senior White House adviser, told Senate investigators he had met with Russian officials four times last year but said he did not collude with Moscow.

Investors fear the persistent political turmoil will derail the Trump administration’s pro-growth economic agenda of tax cuts and infrastructure spending, which helped propel the dollar to 14-year peaks after the November election.
 
U.S. consumer confidence hit a four-month high in reflecting Americans’ more upbeat views on both their current situation and outlook, a positive sign for the already booming economy. With unemployment near a 16-year low and U.S. stocks reaching record highs, consumers remain upbeat, which should continue to support the household spending that accounts for about 70 percent of U.S. gross domestic product.

Key Announcements 

09:30 – GBP: UK Preliminary GDP figure (YoY) Q2 expected to be lower at 1.7% From 2.0%
 
19:00- USD: Fed Interest Rate Decision Expected to remain unchanged at 1.25%