Good morning,
U.S. stocks are set to open sharply lower as Greece hurtles towards default. The beleaguered country has shuttered its banks for the week and closed access to ATMs. Prime Minister Alexis Tsipras announced currency controls Sunday evening on Greek TV after the European Central Bank refused to boost emergency funding. In Europe, investors snapped up German bunds, which fell 15 basis points to 0.77% Monday morning in Europe. Greek yields backed up 379 basis points to 14.63%, the highest since December 2012 but well below 44.21% of March 2012, according to Bloomberg.
China enters bear territory. The Shanghai and Shenzen markets were wildly volatile Monday and are now down more than 20% from their peaks earlier this year. Analysts blamed Greece even though China has minuscule exposure. Banks tumbled sharply even though the People’s Bank of China cut both interest rates and loosened reserve requirements on Sunday. The PBOC hasn’t eased both simultaneously since the depths of the financial crisis in October 2008. NexChange, Quartz
William Hill shuts down Grexit betting market. A deluge of speculators betting on a Grexit this weekend forced U.K. bookmaker William Hill to shut down it’s Grexit betting market. Prior to turning away bets, the gambling giant had the odds of Greece remaining in the EU at 2/9. Financial Times (paywall)
The SNB steps in to lower the Swissie. Swiss National Bank chairman Thomas Jordan has confirmed that the SNB did intervene in the forex markets in an effort to to clip the upward rise of the Swiss franc after Greece turned into a total trainwreck. The SNB meanwhile is still holding rates in the negative, adding that they “would remain active” in currency markets to keep the “significantly overvalued” franc down.” With it’s status as a safe-haven however, that should be interesting to watch should Greece get even worse. Reuters
China considers holding off IPOs for awhile. After seeing over a trillion dollars evaporate from the Shanghai Index, the China Securities Regulatory Commission is said to be considering suspending IPOs in the region until the market stabilizes. With IPOs seen as a ravenous vacuum of liquidity, holding them off for a while is said to be very supportive for the market. Bloomberg
Also on our radar: Puerto Rico Governor declares that the island nation won’t be able to repay its $72 billion in debt (New York Times, paywall)… Morgan Stanley is plotting an expansion in fixed-income, a bloody battlefield of the past (Wall Street Journal, paywall)… GE to sell fleets to Canada’s Elemental Financial for $6.9 billion… Pending home sales are due out Monday at 10:00 ET; expectations are for a 0.6% gain (Econoday).
Photo by DIE LINKE via Flickr.