Euro Weakens On Greece Worries, German Sentiment
The euro weakened against the US dollar after a closely-followed survey indicated a decline in German business expectations. The ZEW indicator of economic sentiment fell in April for the first time since October 2014, sinking to 53.3 from 54.8 in March and missing the consensus estimate of 56.0.
By Peter Martin
Tuesday, April 21, 2015
The current weakness of the world economy is dampening export prospects and reducing the scope for further improvements of the economic situation in Germany,’ said ZEW President Professor Clemens Fues. The current conditions index is strong though, jumping to 70.2 in April from 55.1 in the previous month and reaching its highest level since July 2011. EUR/USD was down 0.23% at 1.0712 by 9am in New York.
Also weighing on the euro, of course, is the ongoing saga of Greece and its debt burden. Eurozone finance ministers meet on Friday to determine whether to grant further bailout funds to help Greece pay government wages and stay on top of debt repayments. In order to secure more liquidity, the Greek government is seeking to pass an act through its parliament to compel public bodies and local authorities to hand over any cash reserves they are holding. Greece must repay close to €1 billion to the IMF next month.
With nothing major on the economic calendar today, focus in the stock market is targeted on earnings, with a number of big names reporting today. So far, the news has been encouraging: Dow Jones components DuPont ($DD) United Technologies ($UTX) and Verizon ($VZ) all beat estimates with their earnings, though revenue came up slightly short of expectations for all three companies. While the adverse effect of the stronger dollar has been mentioned by many companies, as expected, it does not appear to have severely hampered earnings for the most part. Fellow Dow Jones component Travelers ($TRV) did miss with its earnings though.
Dow Jones heavyweight IBM ($IBM) reported after the bell last night and comfortably beat estimates with adjusted earnings of $2.91 per share (versus expectations of $2.80), while revenue was as expected. Shares in the technology giant rose 0.6% in early trading today.
The upbeat cluster of earnings helped to lift the major stock indices on Wall Street and shortly after the opening, the Dow Jones was up 23 points or 0.13% at 18,058, while the broader benchmark of the S&P 500 Index gained 0.23% to stand at 2105.3. The technology-focussed NASDAQ 100 Index fared even better, climbing 0.44% to 4435.9.
Fast food giant Yum Brands ($YUM) reports after the close tonight, along with biotech firm Amgen ($AMGN) and internet bellwether Yahoo ($YHOO).
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