ZuluTrade Blog

Greek PM Tsipras Resigns; Treasury Yields Fall Sharply for a Second Day

Market View | Friday, August 21, 2015 8:58 AM GMT


- Prime Minister Alexis Tsipras resigned on Thursday, hoping to strengthen his hold on power in snap elections after seven months in office in which he fought Greece's creditors for a better bailout deal but had to cave in. Tsipras submitted his resignation to President Prokopis Pavlopoulos and asked for the earliest possible election date. Government officials said the aim was to hold the election on Sept. 20, with Tsipras seeking to crush a rebellion in his leftist Syriza party and seal public support for the bailout program, Greece's third since 2010, that he negotiated. On the other side, amid rapid political changes, Greece made a crucial 3.2 billion euro debt repayment on Thursday using newly released bailout funds, a government source said. (Source: Reuters)

- As Stocks sank, gold ETFs are say 'remember us'. The SPDR Gold Shares GLD 1.83% , the world's largest exchange traded fund backed by physical holdings of gold, has had a rough go of things this year. With the Power Shares DB US Dollar Index Bullish Fund UUP 0.48% , the Dollar Index tracking ETF, up 5 percent year-to-date, GLD has tumbled 4.4 percent...However, stocks have flailed in recent weeks, restoring some of bullion's safe haven Over the past month, the S&P 500 has lost 3.1 percent while the Dow Jones Industrial Average is lower 4.5 percent. Interestingly, GLD's gain over the same time mirror's the Dow's loss: 4.5 percent. While it still has considerable work to do to eat into the almost $1.4 billion it has lost in the current quarter, GLD has tacked on over $150 million in new assets since August 10. (Source: ForexFactory)

- Treasury yields fell sharply for a second day on Thursday as stocks plummeted, with the 10-year yield falling below 2.10% to its lowest level since April 30. The sell-off in stocks, and the accompanying flight to havens, came as investors wrestled with worries about a slowdown in global growth. (Source: MarketWatch)

- Purchases of previously owned U.S. homes unexpectedly rose in July to the highest level since February 2007, consistent with further strength in the housing market. Contract closings increased 2 percent to a 5.59 million annualized rate from the prior month’s revised 5.48 million pace, figures from the National Association of Realtors showed Thursday. The median forecast in a Bloomberg survey called for a drop to 5.43 million. Employment gains and low borrowing costs are helping encourage trade-up purchases, providing a little more fuel for the economy. (Source: Bloomberg)

- On most days, Kazakhstan finds itself in the backwaters of financial markets. Yet, it’s this central Asian nation that has delivered the latest shock to global currency trading. The trigger for the waves of depreciation was China’s decision to weaken the Yuan on Aug. 11, leaving countries competing with the world’s second-largest economy in export markets and those selling goods to it at a disadvantage. That added to the woes of emerging markets already reeling from a looming increase in U.S. interest rates and weakness in oil prices. Some, like the countries of the former Soviet Union, face an additional problem: the ruble’s continued weakness puts them in an unfavorable position in their trade with Russia. Which are supposed to become the most  10 vulnerable currencies to the above depicted facts? These are: Egypt’s pound, Turkish Lira, Saudi Arabia’s riyal, South Africa Rand, Kyrgyzstan’s som, Ghana’s cedi, Armenia’s dram, Turkmenistan’s manat, Zambia’s kwacha and Malaysia’s ringgit. (Source: Bloomberg)

- The New Zealand Dollar (NZD) is continuing its slow and steady uptrend against the Japanese Yen (JPY), with the price approaching the 82.00 resistance area. The technical bias however remains negative due to a Lower Low in the recent wave on daily chart. (Source: FXTimes)

- China August factory activity shrinks to 6-1/2 year low as orders tumble. (Source: Reuters)

- US Equities Thursday's Close: Dow Dones 16991.96 (-2.06%); S&P 500 2035.96 (-2.10%); NASDAQ 4877.49 (-2.82%).

- S&P 500 slides 2.1% for worst day since February 2014.

- SPX and Dow correlation tends towards +1.0 (essential lockstep), but current 60-day is weakest since 2006.

- Today’s Important Events: Germany August GfK Consumer Climate, EZ PMI, EZ Consumer Confidence. CAD CPI.



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