US stocks reversed morning trading losses on Tuesday and ended slightly higher on news reports that Greece has asked financing until the end of July in return for some reform measures demanded by creditors. The dollar advanced with ICE US dollar index gaining 0.2%. S&P 500 recovered from a 1% decline and ended up 0.6%. Uncertainty related to Greek debt crisis and the selloff in China’s stock market are weighing on market sentiment, increasing volatility on the backdrop of high stock valuations. Shares of Advanced Micro Devices Inc. tumbled 15% after the chip maker cut its outlook on Monday. US trade deficit rose to $41.8bn in May from $40.7bn in April, recording a smaller increase than expected. The deterioration in trade balance resulted from fewer exports of aircraft and other manufactures goods. At the same time US job openings rose to 5.36 million in May from 5.33 million in April, a record high since 2000. Investors today will be watching closely for the minutes of the FOMC June 16-17 meeting, which will be released at 19:00 CET. At 12:00 CET Mortgage Applications will be released in US. At 15:30 CET Crude Oil Inventories will be released, and at 19:00 CET FOMC member Williams will speak on economic outlook in Los Angeles.
European stocks extended losses on Tuesday as the meeting of euro-zone finance ministers ended with little progress over Greek bailout extension. The euro fell, Germany’s DAX 30 dropped 2% and France’s CAC 40 lost 2.3%. Euro zone members have given Greece until the end of the week to come up with a proposal. Under a timetable agreed by the 19 leaders of euro-zone, today Greece should submit a formal request for a two-year loan program. Merkel did not rule out rescheduling Greek debt by extending loan maturities, lowering interest rates and allowing a longer moratorium on debt service payments, but excluded a "haircut", or debt writedown as illegal. No important economic data are expected in euro-zone today. Tomorrow at 7:00 CET May trade balance and current account will be released in Germany. The tentative outlook is negative. Today at 12:30 CET Annual Budget will be released in UK.
Nikkei fell 3.1% today as yen strengthened on investor concerns over Greek debt crisis and China market crash, while the current account recorded a surplus for the 11th straight month in May. Tomorrow at 0:50 CET May machine orders, foreign and domestic purchases of bonds and stocks will be released in Japan. The tentative outlook is positive. At 7:00 CET May Machine tool orders will be released.
China’s stock market selloff continues, with Shanghai Composite index falling as much as 8.2% at the start of trading and currently down more than 6%. More than 500 China-listed firms announced trading halts, bringing the total number to around 1,300 of 2,800 shares in mainland China-based companies. State authorities are unveiling new measures like boosting purchases by state agencies to support the market to no avail. China's stock market has so far tumbled 30 percent from its mid-June peak.
Oil prices are falling today as the prospect of increased supply from Iran after a nuclear deal weighs on market sentiment.
Commodities are falling as the selloff in Chinese markets continues. Copper prices fell 3.6% on Tuesday to 2009 levels as all metal prices fell.