Tuesday June 30th

30-06-2015

U.S. stocks index futures on Tuesday indicated a bounce from Monday's sharp decline even as Greece looks set default on a 1.5 billion euro ($1.7 billion) loan from the International Monetary Fund. Reports in the Greek media on Tuesday that Prime Minister Alexis Tsipras is considering the latest aid proposals from the European Union helped European stocks pare some losses and boosted stock futures during London trade. However, German Chancellor Angela Merkel played down any hopes of a last-minute deal with Greece. She said in a Reuters report that she was not aware of any new offer from the European Commission president. Equity index futures for the three main U.S. markets held higher, with Dow Jones industrial average futures up about 90 points. A worsening crisis in Greece sent U.S. shares tumbling 2 percent on Monday with the Dow and S&P posting their worst losses for the year. Asian markets recovered some ground on Tuesday, with Japan's Nikkei closing 0.6 percent higher. Not only does Tuesday bring the deadline for a major IMF loan repayment, but also marks the expiration of Greece's existing bailout terms. Greece has said it will hold a public referendum on Sunday on Greece's bailout program and austerity measures. The failure to secure a cash-for-reforms deal with its international creditors, together with the implementation of drastic capital controls, has fueled concerns that Athens is lurching closer toward a sovereign debt default and possible exit from the euro zone. "Missing the (IMF) payment doesn't change much, what does change is that the program lapses at mid-night and that means we're back at square one," Moritz Kraemer, chief rating office at ratings agency Standard & Poor's, told CNBC. "This would be the first time in over five years that Greece has no support program from the European Union," he said. S&P later Monday downgraded Greece's credit rating to "CCC-" from "CCC." U.S. economic data due this session include the June Chicago purchasing managers' index and June consumer confidence index. The data highlight of the week is the U.S. non-farm payrolls report, which will be published on Thursday. Earnings due this session include ConAgra Foods and Omnova Solutions.Elsewhere, U.S. Treasury yields were marginally higher, while the euro was weaker at $1.118 and the yen was slightly stronger against the dollar at 122.47 yen. The dollar gained nearly half a percent against major world currencies. In addition to Greece, investors are eyeing Puerto Rico, where another potential debt crisis is brewing. Puerto Rico Governor Alejandro Garcia Padilla late Monday said the island needs a restructuring plan for its $72 billion in debt. Asia's stock markets bounced back on Tuesday, recovering from the previous day's heavy selloff, even as Greece inched nearer toward a debt default. Nikkei adds 0.6%. Japan's Nikkei 225 clawed back some of Monday's 2.9 percent slump. Oil prices bounced from three-week lows in choppy trade on Tuesday as investors awaited a Greek debt default, shying away from riskier assets and putting benchmark North Sea Brent crude on course for a second month of losses. Brent crude futures were up 52 cents at $62.53 a barrel at 8:23 a.m. EDT (1223 GMT), after falling to $62.01 on Monday, the weakest finish since June 5. The contract is heading for its second straight monthly decline and is down almost 5.5 percent in June. The contract was heading for a decline of more than 5 percent for June. U.S. crude rose 26 cents to $58.59, having closed down $1.30 at $58.33 a barrel, its lowest settlement since June 8. It is set for its first monthly decline in three and has fallen about 3.5 percent this month. Gold dipped on Tuesday as it failed to garner strong safe-haven bids even with Greece heading for a debt default later in the session, while a robust dollar and a recovery in stock markets also weighed. Spot gold fell 0.3 to $1,176.35 an ounce by 0638 GMT, after gaining 0.6 percent in the last two sessions. For the month, the metal is headed for a 1 percent decline. Thedollar gained 0.4 percent against a basket of major currencies.