Here’s what you need to know.
Capital controls might be coming to Greece. Germany’s Sueddeutsche Zeitung (SZ) newspaper reports European governments will push for capital controls to prevent money from fleeing the country if a deal is not agreed to this week. The capital controls would limit the amount of cash that could be taken out of ATMs, as well as abroad, and be similar to those imposed on Cyprus in 2013. Greece’s 2-year yield is higher by 76 basis points at 29.67%, a fresh cycle high.
The EU’s top court defended Mario Draghi’s 2012 bond buying plan. The EU Court of Justice ruled ECB head Mario Draghi’s 2012 Outright Monetary Transactions program didn’t reach beyond the central bank’s authority. The program was part of Draghi’s pledge to do “whatever it takes to preserve the euro.” According to the court, the program was announced during a “special situation” and “is intended to rectify the disruption of the European System of Central Banks’ monetary policy, which arose as a result of the particular situation of government bonds issued by certain” countries.
Germany’s ZEW survey disappointed. Economic sentiment in Germany slumped to its lowest level since November as the strong euro and worries over the Greek debt drama weighed. Tuesday’s reading of 31.5 marked a sharp decline from May’s 41.9, and was well below the 37.1 that economists were forecasting. The euro is lower by 0.3% at 1.1249.
The UK exited deflation. Consumer prices ticked up 0.1% in May, matching the consensus estimate. Core inflation quickened to up 0.9% from up 0.8% the prior month, but missed the 1.0% print that was anticipated. The British pound is down 0.1% at 1.5580.
Belgium is going after Facebook on privacy. Belgium’s privacy watchdog is suing Facebook over its tracking practices, and EU states approved a draft which would allow national governments to have authority over such matters. The Wall Street Journal suggests, “At issue for the Belgian regulator is how Facebook tracks Internet users on external websites through the use of “like” and “share” buttons, raking in data that could be used for targeted advertising, for instance.”
Gap is closing stores and laying off workers. The retailer announced it will close 140 stores and lay off 250 corporate workers during this fiscal year. Over the “next several years,” the number of stores closed is expected to climb to 175.”Customers are rapidly changing how they shop today, and these moves will help get Gap back to where we know it deserves to be in the eyes of consumers,” noted CEO Art Peck.
European auto sales grew at the slowest pace in 6 months. Sales rose 1.4% in May to 1.15 million. According to Bloomberg, “Concerns about unemployment and the Greek sovereign debt crisis held back demand at Volkswagen AG and Renault SA.” Deep discounting across the industry helped provide support.
Honda is recalling a ton of cars. The automaker is recalling 1.39 million Accords and Civics due to faulty front passenger-side Takata air bags. The announcement does not increase the total number of recalls from 6.3 million, because the vehicles had already been recalled to replace their driver-side air bags. Reuters reports, “Honda said its dealers have been replacing air bag inflators at a rate of 50,000 per week, and that the pace of air bag inflators replaced will accelerate.”
Stock markets fell around the world. China’s Shanghai Composite (-3.5%) saw heavy selling to pace the decline in Asia, and Spain’s IBEX (-1.5%) leads the way lower in Europe. S&P 500 futures are down 9.75 points at 2065.75.
US economic data flows. Housing starts and building permits are due out at 8:30 a.m. ET. The US 10-year yield is lower by 4 basis points at 2.32%.
Business Insider Emails & Alerts
Site highlights each day to your inbox.