Good morning,
Markets globally sighed in relief as China’s stock exchanges rallied in response to extraordinary moves from the government, including an investigation of malicious short-sellers. We’ll see how that goes. European markets were up about 1%; even oil prices recovered modestly on the hope that China would pull out. At 8:30 a.m. ET watch for weekly jobless claims in the U.S. At 10:00 a.m. Federal Reserve Governor Lael Brainard speaks, followed at 12:30 p.m. ET by Kansas City President Esther George. Don’t count on them discussing the FOMC minutes released Wednesday; the consensus is still looking for a rate hike later in the year. Unless. Unless China and Greece spoil the program.
The final, final deadline looms for Greece, which must submit new reform proposals by the end of Thursday to stave off a Grexit. Banks, closed since June 28, will remain shuttered until at least Monday. The stock market is also closed. All 28 eurozone leaders will meet Sunday in Brussels to determine Greece’s fate. Local reports say Prime Minister Alexis Tsipras is offering a $13.3 billion reform package that includes hikes in corporate taxes and the VAT. Bloomberg/Reuters
Chinese shares gained nearly 6% Thursday after the government introduced fresh measures to inspire buying. They include banning shareholders at from selling their holdings, allowing banks to roll over loans secured by shares, renewed pledge by the central bank to infuse liquidity into the market, and the expansion of stock purchases to include more small- and medium-sized firms. The Shanghai Composite Index ended the day up 5.8%, its best recovery since 2009, while the Hang Seng Index was last seen trading 4.1% higher. Japan’s Nikkei was up 0.6% at the close. CNBC/Financial Times (paywall)
China’s mixed inflation picture gives central bank room to ease further. The consumer price index quickened to 1.4% in June from a year earlier, faster than May’s 1.2%, and above the 1.3% forecast. While the CPI rose slightly, it was still manageable. The producer price index, meanwhile, dropped 4.8% year-on-year in June, a steeper fall from the previous month’s 4.6% decline. Financial Times (paywall)/Xinhua
This is what inflation looks like: Panicked Greeks buying hard goods rather than keep cash in banks. At retailers, consumers are buying all kinds of appliances with debit cards, depleting their bank accounts in anticipation of a possible Grexit or haircut on deposits. One jeweler says he declined to sell more than $1 million in gems; he didn’t want the cash. New York Times (paywall)
Tensions are running high in talks with (not Greece) Iran. Apparently the diplomats are behaving less than diplomatically as everyone loses their cool. The U.S. Congress has set a deadline for Thursday — though U.S. officials are saying that doesn’t matter. Iranian news sources are reporting that Secretary of State John Kerry and Iran’s Foreign Minister Javad Zarif got into a shouting match. Wall Street Journal (paywall)
London is bracing for worst strike to hit the Underground. “Some 20,000 workers from four major unions are walking out to protest low pay—in particular the raises, bonuses, and other conditions tied to the new 24-hour service that will launch in September.” Quartz
Best headline on the NYSE outage on Wednesday goes to The Economist: Glitch Perfect.
Photo by Charles Tsevis via Flickr.