Greece is the word

Good morning, Greece returned to the capital markets last night, after a three year absence, selling EUR3 billion worth of five year bonds with a coupon of 4.375% at a yield of 4.625%. The issue just scraped away and was most likely helped along by Greece buying back bonds issued in 2014.

The Dow has closed 0.5% higher with investor sentiment buoyed by strong profit results from Caterpillar and McDonald’s. Caterpillar reported quarterly sales rose 9.6% and McDonald’s its highest comparable sales growth in five years. The S&P400 rose 0.3% and the Nasdaq was flat, weighed down by Alphabet.

A good example of political risk comes in the light of the Tanzanian government slapping a demand for USD190 billion, that is Billion not million, in unpaid taxes on London listed gold miner Acacia. Acacia shares closed 7.7% lower in London trade.

Meanwhile our market continues to stagger sideways within a pretty tight range. Today will be another up day and looking at the weekly price chart of the ASX200 below we might conclude that a breakout is imminent perhaps coinciding with our own reporting season which kicks off with the CBA’s full year results on 9th August.

At 11:30 this morning we get the latest inflation report from the Reserve Bank with economists forecasting a quarterly rise of 0.4%, 0.5% in the March quarter, and 2.2% year-on-year, from 2.1% in the year to March. Numbers weaker than forecast will likely take some of the recent steam out of the Australian Dollar.

This evening at 6:30 the UK will report on June quarter GDP; forecasts are for +0.3% qtr and 1.7%yoy from 2% for the March tear-on-year number.

In the meantime index futures are suggesting a 41 point rise today.

Kind regards

Alex