Greek confidence vote looms as Merkel faces bailout rebellion - as it happened

An unexpectedly weak US manufacturing figure for New York sent a mini-shock through markets on an otherwise relatively quiet day. But shares soon recovered their poise, as investors awaited the week’s key vote on the Greece bailout in the German parliament, as well as a possible vote of confidence by Syriza which could lead to new elections as early as next month. The final scores showed:

• The FTSE 100 finished virtually unchanged, down 0.44 points or 0.01% at 6550.30
• Germany’s Dax dropped 0.41% to 10,940.33
• France’s Cac closed up 0.57% at 4984.83
• Italy’s FTSE MIB added 0.69% to 23,407.99
• Spain’s Ibex ended 0.19% better at 10,900.3
• As previously reported, the Athens marked edged up 1.04% at 680.94

On Wall Street the Dow Jones Industrial Average is currently up 39 points or 0.23%.

On that note, it’s time to close up for the day. Thanks for all your comments, and we’ll be back tomorrow.

A survey in Germany seems to show people are not overly thrilled with the agreement with Greece:

Greece’s stock market has ended the day higher although banking shares are still under the cosh.

The Athens index is up 1.04% at 680.94, but the banking index has dropped 8.67% as concerns about recapitalisation continue. Piraeus Bank is down 13.61% while Eurobank Ergasias has fallen 12.12%.

17 Aug 201511.25 EDT

Phillip Inman

Here’s our report on the latest comments from Yanis Varoufakis, who has once more attacked the bailout proposals:

Greece’s former finance minister Yanis Varoufakis has accused European leaders of allowing oligarchs to maintain their stranglehold on Greek society while punishing ordinary people in a line-by-line critique of the country’s €86bn (£61bn) bailout deal.

Varoufakis said the Greek parliament had pushed through an agreement with international creditors that would allow oligarchs, who dominate sections of the economy, to generate huge profits and continue to avoid paying taxes.

The outspoken economist published an annotated version of the deal memorandum on his website on Monday, arguing throughout the 62-page document that most of the measures imposed on Greece would make the country’s dire economic situation worse.

The full story is here:

Some talk about a possible Greek election date:

Back with the US and some strong housing figures.

US housebuilder sentiment rose to its highest level in nearly a decade, according to the National Association of Home Builders. Its market index rose from 60 in July to 61, in line with expectations and the highest since a matching reading in November 2005. The association’s chief executive David Crowe said:

Today’s report is consistent with our forecast for a gradual strengthening of the single-family housing sector in 2015. Job and economic gains should keep the market moving forward at a modest pace throughout the rest of the year.

The better news has helped markets recover some of their poise after falling back sharply in the wake of poor New York manufacturing figures.

The Dow Jones Industrial Average is now down just 2 points, the FTSE 100 is 7 points lower and Germany’s Dax has dropped 79 points.

Here are the reported terms of the ESM financing assistance for Greece, as revealed by Bild’s Dirk Hoeren:

Here are the falls on the Dow:

Wall Street has opened sharply lower, predictably.

With oil still around six-year lows and the poor New York state manufacturing figures pointing to a slowdown, the Dow Jones Industrial Average has dropped 123 points or 0.7% in early trading. The US Federal Reserve is widely expected to begin raising interest rates this year, perhaps as soon as the September meeting, but such a move would cause concern if the world’s biggest economy is starting to splutter.

Best not to pay too much attention to this US data, reckons Rob Carnell at ING (although it being a quiet August day, markets already have of course):

The latest Empire manufacturing survey is a good reminder of why we don’t pay much attention to regional activity surveys – to be charitable, they are a bit choppy. In this case, the Empire survey fell from a moderate reading of 3.86, to -14.92. And you have to go right back to 2009 and the heart of the financial crisis to find anything this bad.

For what it is worth, and in our opinion, it is not a lot, the new orders and shipments series utterly collapsed this month. Inventories, which had been heading down, fell further, as did the average workweek (in complete contrast to the last labour market report). Interestingly, despite this apparently dismal; backdrop, although the index of employees fell slightly, it remained positive. Odder still, the outlook for six-months’ time improved to 33.64 from 27.04, with new orders and shipments then expected to be strong or picking up. We doubt there is much merit in these expectations either.

There will be a bunch of other regional activity surveys out in the coming weeks. Even when they all point in the same direction, this need not give the correct steer for the national ISM survey, or for the strength of national manufacturing. But this is a quiet week, so markets may give this more attention than it deserves.

Oh dear. A key survey of the US manufacturing sector has just hit its lowest level since the great recession, and markets aren’t happy.

The Empire State index, which tracks factory activity in the New York area, slumped to -14.92, from +4.75 in July.

That’s the weakest reading since November 2009, with manufacturers reporting a slump in new orders and deteriorating economic conditions.

The reading has hit European stock markets, as it raises new concerns over the strength of the US recovery at a time when the Fed is (maybe) close to raising interest rates.

The FTSE 100 is now down 35 points, or 0.5%, at 6530, and the German DAX is also dropping into the red....

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Back in Greece, health minister Panagiotis Kouroumblis has predicted that autumn elections could be needed, Reuters reports.

Kouroumblis told Skai TV that it would give the government the authority needed to implement the plan:

“Elections are not the best choice ... but for the economy to pick up there must be political stability.

To implement such a serious programme with painful measures, you cannot do that without a popular mandate.”

Greek journalist Nick Malkoutzis agrees that a confidence vote could quickly lead to elections (as explained earlier):

Angela Merkel is now attending a Christian Democrats party board meeting today; another chance to shore up support ahead of Wednesday’s Greek bailout vote.

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Merkel’s grand coalition has 504 out of the 631 seats in the Bundestag. Thus, she can cope even if 120 MPs do defy her, as Bild reckons today.

CDU/CSU MPs will take their lead from Wolfgang Schauble as much as Merkel herself, argues Carsten Nickel of Teneo Intelligence.

He writes:

What counts in the Bundestag (much more than the IMF), meanwhile, is the endorsement of Germany’s most popular politician, Finance Minister Wolfgang Schaeuble, who single-handedly guarantees support from a number of sceptics within CDU/CSU.

His support voiced in Greece-sceptic tabloid Bild am Sonntag is the cornerstone for yet another unsurprising result this Wednesday.

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Finally, some economic data. And the latest survey of eurozone trade suggests that the weaker euro is helping exporters.

The eurozone’s trade surplus jumped to €26.4bn in June, according to Eurostat, up from €16.0bn a year earlier.

Exports were 12% higher than in June 2014, at €182.7, while imports rose just 7% year-on-year to €156.4bn.

Imports have been lagging exports since the eurozone debt crisis began, as demand waned in the face of austerity and recession.

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