Global markets end flat; euro rises against dollar

EU newsflow in focus

German press reported (over the weekend) that European Central Bank (ECB) is working a bond spread targeting plan

Report says ECB will announce acceptable yield spreads and buy bonds till objective achieved.

Euro moved above 1.235 against the US dollar; Spanish and Italian 2-year bond yield spreads over Germany fell to lowest since May.

ECB says

“Absolutely misleading to report on decisions, which have not yet been taken” 

“Report states individual views, which have not yet been discussed by the ECB's governing council.”

“It is wrong to speculate on the shape of future ECB interventions based on statements by govt officials.”

“ECB will act strictly within its mandate.”

German Central Bank: Active opposition

"Govt bond purchases by the Eurosystem are to be seen critically and entail significant stability risks."

Bond market hopeful

Spain's 10-year bond yield went down 21 basis points on day at 6.28% and its 2-year bonds yields fell 18 basis points to 3.51%

Italy's 10-year bond yield dropped below 5.8% - at 1.5-month low and 2-year bond yield went down 3 basis points to 3.01% 

Greece also in focus; German and Greek finance ministers meet to rework bailout terms

Germany, post the meet, says “Not possible to agree a “substantial softening” of the aid terms.”

Euro area finance minister chief Jean-Claude Juncker will visit Greece tomorrow for further discussions.

US markets were steady amid thin newsflow. Volumes remained dismal at 30% below average.

Chicago Fed national activity index for July stood at negative 0.13, which was mildly better than negative 0.36 in June

Apple hit a record while Facebook halved from issue price.

US markets at close: Dow Jones fell 0.03% to 13,271.7 and S&P 500 Index closed flat at 1,418.1. Nasdaq Composite declined 0.01%

European markets at close: DAX declined 0.1% and CAC was down 0.2%. FTSE slipped 0.5%. Spain lost 1.2% and Italy plummeted 1%.

Currencies

Euro was sideways but was holding on to gains.

Euro is currently at 1.2355 to the dollar

US Dollar was tad lower, but remained rangebound

Dollar Index was at around 82.4 since Friday

Australian Dollar was lower at 1.04 as against 1.05 to the US dollar on Friday

Commodities

Brent crude was largely unchanged at around USD 114 a barrel

WTI crude gained 2 cents at around USD 96 a barrel

API inventory report will be announced today

LME Copper was down 1.1% yesterday, which rose 0.1% today morning.

Gold was flat at USD 1623 an ounce

What to watch out for

Spanish Treasury bills auctions

UK public finances