Optimism on progress in Greece debt negotiation gave risk markets a strong boost overnight. DJIA rose 103.83 pts, or 0.58%, to close at 18119.78 while S&P 500 rose 12.86 pts, or 0.61%, to close at 2122.85. NASDAQ closed at new record high of 5153.97, up 36.97 pts or 0.72%. Asian markets also followed with Nikkei trading up 300 pts, or over 1.5% at the time of writing. Meanwhile, in the currency markets, dollar is indeed the main beneficiary of the return of risk appetite and is trading broadly higher against other major currencies. The dollar index is back above 94.8 after dipping to 93.56 last week. Rebound in the greenback sent gold below 1200 again, which is trading at 1185. Crude oil, on the other hand, stays in tight range around 60 handle.
The emergency Eurogroup summit on Greece issue ended with optimism that an agreement would be made within this week. The head of Eurogroup Jeroen Dijsselbloem hailed Greece's new proposals as a "positive step" and "work can start immediately" to address the remaining issues. European commission vice president Valdis Dombrovskis also noted that the proposals are "inline withe the institutions' proposals" and would target surpluses in the next four years. To recap, the progress made include primary surpluses that are closer to international creditors demand, sets to eliminate early retirement options, sales tax hike and raise tax on middle to higher income earners as well as businesses. Greek prime minister Alexis Tsipras said that the negotiations with creditors will continue over the coming 48 hours to achieve a "total and viable solution"
Released from China, HSBC PMI manufacturing rose to 49.6 in June versus expectation of 49.2. Markit noted that the PMI was a "mixed bag of data in June" and "companies have relatively muted growth expectations as demand conditions both at home and abroad remain relatively subdued". It urged the Chinese government to "step up their efforts to stimulate growth and job creation in the second half of the year." Also released in Asian session, Japan PMI manufacturing dropped to 49.9 in June. Australian house price index rose 1.6% qoq in Q1 while conference board leading index dropped -0.3% in April.
Looking ahead, PMIs from Eurozone will be the main focus in European session while UK will release CBI trends total orders. US will release durable goods orders, house price index and new home sales.