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Equity markets have rebounded this morning, with evident relief among investors that the Greeks have actually managed to submit their loan application. Now we have to wait for the creditors to decide whether Athens has made enough concessions. Signs of unhappiness at the proposed deal could easily reverse the good feeling seen so far this morning, but for now markets just appear to be pleased that negotiations are underway once again. Having stared into the abyss, there may now be just enough willingness to strike a deal that will take the Greek problem off the agenda for a few months at least.
China has bought itself a temporary respite too, with markets rallying on news of government instructions to major shareholders to hold off on share sales. If this is followed up by fresh liquidity measures then further panic selling may be averted, but the turmoil of the past week is a salutary reminder that the still-immature Chinese equity market is not an area for the faint-hearted.
Primark sales continue to drive performance at Associated British Foods, with a return to form here driving a 3% rise in the share price today that has propelled the firm to the top of the FTSE 100. However the warning about currency impacts on the sugar division will reinforce calls for ABF to spin off Primark and allow this high street success story the freedom to ramp up expansion plans abroad.
Fed minutes last night showed that some policymakers were still concerned about a premature rate hike, and with soft employment data now public knowledge their fears appear justified. Greece got a mention even here, a sign that the US is deeply concerned and frustrated that the eurozone has yet to solve this particular Gordian knot.
With a September hike now a diminishing possibility once again, the dollar looks set to weaken, providing space for an equity rally, especially if the weekend brings a Greek deal. Ahead of the open, we expect the Dow Jones to start 122 points higher at 17,637.