Daily Market Report - 25/06/2015

Hopes of a breakthrough between Greece and its creditors were dashed last night after a meeting between Eurozone finance ministers broke down after less than an hour. The stumbling block over reforms to pension cuts and tax hikes cropped up again when reforms submitted by Greece were sent back with a raft of suggested adjustments. Tsipras criticised Greece’s creditors of foul play, stating that the repeated rejection of equivalent measures never happened before with Portugal and Ireland.

Without a deal, Greece’s current bailout expires on Tuesday, meaning they may miss making a payment of 1.6B EUR’s to the IMF.

German business morale weakened for a second straight month in June, suggesting concerns about the Greek debt crisis are hitting the mood amongst companies across Europe's largest economy. IFO's business climate index dropped to 107.4 in June from 108.5 in May. That was its weakest reading since February and was below the Reuters consensus forecast for a reading of 108.1

Although confidence is slowing many economists do expect Germany  to grow faster in the April-June period quarter given that the latest data has shown orders, output, exports and retail sales are all rising.

The world’s largest economy shrank less in the first quarter than previously estimated, aided by a bigger gain in consumer spending. GDP in the U.S. only fell at a 0.2 percent annualized rate, revised from a previously reported 0.7 percent drop. The harsh winter weather and port delays that damped growth at the start of the year have given way to increases in consumer spending and housing, boosting Federal Reserve projections that the setback was temporary. 

However, still hindering growth is lower oil prices which is hitting investment in the energy industry. Also a strong dollar continues to hurt exporters.


Key Announcements

13:30 - USD - Intial jobless claims expected to rise from 267k to 272k 
14:45 - USD - Markit Services PMI (Jun) expected to rise from 56.2 to 56.7