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Global equity and commodity markets will be guided by Chinese investor sentiment this week, with concerns that disappointing manufacturing data, released on Friday, could push the Shanghai Composite into unchartered territory. Reacting to speculation that government intervention measures could be unsustainable, the Chinese equity market finished the session 8.48% lower.
Greek Prime Minister Tsipras came under fire over the weekend, with allegations that his party had initiated a ‘Plan B’ in the event that bailout talks with European officials were not successful.
On the economic front important GDP, Unemployment Claims, Consumer Confidence, and Durable Goods data will be released. The Federal Open Market Committee will confirm any changes to the funding rate on Wednesday. Economists expect no change.
The September Dow futures contract is pointing to a 61-point drop in the index, with Chinese fears expected to subdue any potential upside movements. Investors will be looking for comfort in earnings, with a number of financial companies expected to report.
Durable orders, which quantify shipments and demand, will be released at 8:30 am, with economists pricing in a month-on-month figure of 3% to 3.2%.
Greek and European officials will continue to discuss terms of the €85 billion bailout on Tuesday. Developments over the weekend could hamper negotiations and once again weigh on the markets.
Consumer Confidence will paint an important picture, with the index expected to hit 100 for the July period. This would be slightly below the previous period.
Fed Chief Janet Yellen is expected to announce interest rates are unchanged at 0.25% on Wednesday, with the FOMC statement released at 2 pm. Pending home sales for June will measure the buoyancy of the real estate market and could rise by 1% to 1.5% for the period.
Gross Domestic Product estimates for Q2 could influence market movements during the morning session, with an expectation of 2.6%. Other economic data to be released includes Initial and Continuing Claims.
Relatively quiet end to the week, with the Chicago PMI, Michigan Sentiment and Employment Cost Index expected to be announced. Consensus forecasts for July manufacturing data indicate a rise from 49.4 to 50.5.
Greece could once again be a sticking point for investors this week, with fresh concerns that political infighting in the ruling Syriza party could cause delays. Officials are expected to meet in Athens today to discuss the technicalities of the third bailout tranche.