Last week was broadly positive and buoyant for markets, with major indices rising modestly with a noticeable reduction in volatility. Little economic news was released, although the US second quarter GDP growth came in at 2.3% on an annualised basis, below a 2.6% forecast. Additionally, whilst the Federal Reserve’s meeting was widely watched on Wednesday for an indication of the timing of a rate rise, post-meeting minutes gave little clarification, with current interest rates remaining at historic lows. The first US rate rise is broadly expected to be in September to December.

Chinese markets were somewhat more settled last week and heading for smooth sailing for now, although there are concerns over the long-term sustainability of the government’s market support programme. Much of the faith in the market that was held before the crash and the ability of the government to control excess movements has been eroded and it will likely take many years to rebuild both domestic and foreign investor confidence. In the shorter term, the market appears to have found a new level, however, with market intervention by the government currently in place there may be stormy waters ahead with further falls and volatility.

Whilst Greece has been out of the headlines over recent weeks, the national stock market has opened today for the first time in five weeks, falling close to 23%. This was widely expected and will have little knock on effect to other markets, however, it does illustrate investor reaction to the new bailout and the current state of the Greek economy.

Index          Open          Close          Change          % Change
FTSE 100   6579           6696           +117               +1.78%
S&P 500     2079           2103           +24                 +1.15%
Dax            11347          11309         -38                  -0.33%
Cac 40       5057            5082          +25                 +0.49%
Nikkei 225  20544          20585        +41                 +0.20%

Monday:

US – Manufacturing data is released

Tuesday:
Chin- Composite PMI

Wednesday:
None

Thursday:
Japan – Announce monetary policy

Friday:
US – Department of Labour publishes monthly employment report