‘New’ Greek proposal helps inspire widening losses for Eurozone

After flirting with the possibility of a greenish morning, or at the very least the staving off of more precipitous declines, the markets began to widen their losses led, of course, by the Eurozone.

In a flurry of news frustratingly reminiscent of the debacle that was last week, reports came out this morning that Greece has submitted a 7 page proposal, 3 of which deal with fiscal targets whilst the other 4 discuss how the country would achieve debt sustainability. There are a few interesting things about this document: it’s a whopping 40 pages less than the proposal submitted last week; it sees Greece angling for €6.7 billion from the European Stability Mechanism to pay off its ECB debts; and finally, the speed with which reports came out suggesting it is insufficient.

Whilst the European Commission combs the short document, multiple unnamed EU officials have already stated the proposal doesn’t provide anything substantially different from what was offered at the start of the month, capturing what many likely already suspected: this proposal is yet another damp quid. This is hardly surprising, however. The language of Tsipras and Varoufakis in the past few days has seen the Greek leaders firmly put the onus on the country’s creditors, whilst the creditors themselves have done much of the same in the opposite direction. With the DAX not far away from a 4 month low, and the rest of the Eurozone looking just as sickly, Greece and its creditors are stuck in a fiscal purgatory that is tainting the entire market.

This morning saw the FTSE do what the FTSE has regularly done over the past couple of weeks; it ignored the fact that the UK saw its best trade balance for 13 months to follow the Eurozone’s lead and maintain its near 10 week lows. Even the strong gains for oil and copper, prompted by more hopes for Chinese stimulus after the country posted another soft inflation figure, couldn’t help the FTSE, with only Vedanta Resources posting gains out of its key commodity stocks.

The US futures got in on the loss-filled action this morning, as a rebound for the dollar helped keep the Dow Jones damp as Tuesday continued. The US will offer up what is likely to be the only piece of significant non-Greek news this afternoon in the form of the JOLTS job openings; the figure is expected to improve on the one posted in May, something that could spell more trouble for the Dow following that strong non-farm data last Friday.