US stocks rose on Tuesday as investor optimism was buoyed by hopes that Greece and its creditors are nearing a compromise on Greek debt impasse. Equities were boosted by reports about a possible six-month debt extension of Greece’s bailout program, which would allow the country to negotiate a new deal with creditors while avoiding a default. Tuesday report by the Labor Department indicated that job openings in the US rose in December to the highest since 2001 and the number of people hired climbed to the highest level since 2007. Dollar strengthened on Tuesday after hawkish statements by two voting members of the Federal Reserve’s policy committee. Jeffrey Lacker, president of the Richmond Fed, who spoke on economy yesterday in North Carolina, told reporters that a June rate hike was an “attractive option” for him. And John Williams, the president of the San Francisco Fed, said conditions are “getting closer and closer to those where it makes sense to really start thinking seriously about starting this process of normalization.” Today at 13:00 CET Mortgage Applications for the week ended February 6 will be released in US. At 20:00 CET Monthly Budget Statement for January will be released in US. The US Government is expected to run a higher budget deficit compared with the previous month.
European stocks closed higher on Tuesday as market participants’ optimism was boosted by reports of possible Greece deal at Eurogroup meeting on Wednesday. Stoxx Europe 600 gained 0.6% , bouncing back from a slide on Monday. In a reversal of earlier steps, Greek government has announced that it plans to go ahead with the privatization of the country’s main port of Piraeus, as country’s creditors demand. Greece has also backed from earlier demands to write-off part of its debt. After earlier reports about possible quick resolution of the Greek debt crisis, Germany’s Finance Minister Schaeuble told reporters at the Group of 20 meeting in Istanbul that any speculation about a possible six-month extension of Greece’s bailout program was fantasy and no hasty deal would be reached on Wednesday. Germany demands that Greece abide by the existing bailout program. European Union leaders will hold a summit meeting on Thursday, offering an opportunity for more negotiation. A Eurogroup meeting will take place on February 16. So far markets have discounted the possibility of Greek default.
Nikkei fell yesterday on worries about possible fallout from Greek bailout crisis. Japanese markets are closed today for a public holiday.
Oil fell yesterday after advancing for three consecutive sessions. The gains in last three session were driven by expectations that declines in active drilling rigs would help ease the oil supply surplus. But the oversupply still persists, and investors expect the data that will be released today at 16:30 CET to show another weekly increase in US oil supplies to record levels.
Copper fell the most in more than a week after reports on Tuesday indicated China’s consumer prices rose at the slowest pace in more than five years in January while producer prices continued falling. The lower inflation deepened concern that demand will decline in China, the world’s biggest user of industrial metals. Nickel, aluminum, zinc, lead and tin also declined.