Here is what you need to know.
China devalued its currency. The People’s Bank of China set its yuan midpoint at 6.2298 per dollar, 1.85% weaker than Monday’s close. The devaluation made for the biggest one-day drop in more than 20 years and comes as Beijing tries to combat its slowing economy. The yuan hasn’t been this weak against the dollar since September 2012. Sean Callow, a senior FX strategist at Westpac, told Business Insider, the devaluation is likely a result of the possible delay of the yuan being included in the IMF SDR basket, weak Chinese economic data and preparation for the Federal Reserve possibly raising interest rates later this year. Callow believes the announcement is “is a welcome step towards a market-determined exchange rate.” China’s yuan fell 1.9% to 6.3250 per dollar.
Greece secured its bailout. Negotiations lasted throughout the night, but Greece and its creditors were finally able to agree on a new deal. The three-year deal is expected to be worth up to 86 billion euros ($US94.75 billion), but the size of the package has yet to be announced. Kathimerini, a Greek daily newspaper reports, the government has agreed to 35 actions, which must be achieved before funding begins. It seems as though all parties involved dislike the deal. Greece’s 2-year yield is lower by 363 basis points at 14.09%.
Singapore’s economic growth has slowed to a 3-year low. Singapore’s economy contracted at a 4.0% clip in the second quarter, improving from the initial reading of down 4.6%. The upward revision lifted the annual growth rate to up 1.8% from up 1.7%. Despite the revision, growth came in at its weakest since September 2012. Singapore’s Ministry of Trade noted the “growth outlook of regional economies has generally softened.” Singapore’s dollar is down 1.4% at 1.4014 per dollar and at a five-year low.
Japan has returned to nuclear energy. Kyushu Electric Power Company has restarted its Sendai nuclear plant after being shutdown for four and a half years. Japan shuttered its nuclear plants after the 2011 earthquake and tsunami caused a nuclear meltdown at the Fukushima Dai-ichi nuclear plant. According to AP, “All of Japan’s 43 workable reactors were idled for the past two years pending safety checks.”
German economic sentiment declined. German ZEW Economic Sentiment fell to 25.0 in July, down from 29.7 in June. Economists were expecting a jump to 31.7. “The German economic engine is still running smoothly. However, under the current geopolitical and global economic circumstances a substantial improvement of the economic situation in Germany over the medium term is improbable. That is why economic sentiment has declined,” said ZEW President Professor Clemens Fuest. Meanwhile, the euro zone as a whole saw its reading improve to 47.6 in July from 42.7 in June. The euro is little changed at 1.1025.
Google is reorganising. The web search giant is now a subsidiary of a new and larger company called Alphabet. The new company will oversee the new projects Google has been rolling out recently. Google co-founder Larry Page has been named CEO of Alphabet while Google’s other co-founder, Sergey Brin, will serve as Alphabet’s president. Sundar Pichai, who has been running Google since October, has been named the subsidiary’s CEO.
Shake Shack crushed estimates. The burger chain announced earnings of $US0.09 per share, easily surpassing the $US0.03 that Wall Street analysts were expecting. A 12.9% jump in same store sales was well ahead of the 9% gain that analysts anticipated. Revenue surged 75.9% to $US42.8 million. The company announced a secondary share offering of four million shares. Shares of Shake Shack were higher by as much as 10% in after-hours trade.
Stock markets all over the world are lower. Australia’s ASX (-0.7%) led Asian markets lower and Germany’s DAX (-1.8%) paces the decline in Europe. S&P 500 futures are down 11.25 points at 2088.50.
US economic data is light. Productivity and unit labour costs are due out at 8:30 a.m. ET and wholesale inventories will cross the wires at 10 a.m. ET. The US 10-year yield is lower by 6 basis points at 2.17%.
Earnings reports slow. Aecom Tech, JA Solar and QIWI are among the names scheduled to report ahead of the open. Computer Sciences, Fossil and Symantec highlight the companies set to report after markets close.
NOW WATCH: Money & Markets videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.