Asian indices tumbled sharply today following the stock market rout in China. At the time of writing, the China Shanghai composite is down -3.8%, after losing nearly -5% earlier in the day, proving the failure of the government's massive intervention. Overall, 1300 companies have halted trading which locked up $2.6T in capital, or around 40% of market capitalization. The People's Bank of China pledged to "actively assist China Securities Finance to obtain ample liquidity." The free fall in Chinese markets spreaded to other Asian markets too with Nikkei down over -400 pts or -2.0% and is trading below 20000 handle for the moment. Hong Kong HSI is losing another -4.2% and more than -1000 pts. In the currency markets, yen is generally higher on risk aversion while Aussie and Kiwi are under some pressure. There are also talks that the crash in China, together with development in Greece, might spread over to other parts of the world which would delay Fed's rate hike.
In Eurozone, after the emergency summit in Brussels, European leaders asked Greece to revive the economic proposal before Sunday to secure the final aids to avoid a default. German Chancellor Angela Merkel sounded cautious and she warned that "we have only a few days left to find a solution" and she's "not especially optimistic". European commission president Jean-Claude Juncker said that a "Grexit scenario" was prepared in detail. European Council President Donald Tusk also said that "the stark reality is that we have only five days left ... Until now I have avoided talking about deadlines, but tonight I have to say loud and clear that the final deadline ends this week." And Tusk warned that "our inability to find agreement may lead to the bankruptcy of Greece and the insolvency of its banking system." Nonetheless, Greek prime minister Alexis Tsipras sounded upbeat and said that "the discussion took place in a positive climate.... The process will be extremely fast. It starts in the coming hours, with the aim to conclude by the end of the week at the latest."
On the data front, UK BRC shop price index dropped -1.3% yoy in June. Japan current account surplus widened to JPY 1.64T in May. Canada will release building permits later today. US will release FOMC meeting minutes.