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Daily Agenda: Greece Returns to the Spotlight

Impeachment process rolls forward in Brazil; Credit Suisse posts loss; China posts weaker-than-expected CPI.

After a long absence from the spotlight of global market sentiment, Greece has returned to investment risk narratives with a 3 percent increase for the benchmark Athens Stock Exchange index and a corresponding rally for the nation’s sovereign bonds. The market reaction follows the news that finance ministers from throughout the euro zone have reached out to the International Monetary Fund with a new bailout plan. IMF participation would provide political leverage for policymakers from EU nations that are more skeptical in providing an additional approval for austerity measures. After a meeting in Brussels yesterday, the conclusion reached by policymakers from both bodies was an acknowledgement that Greek Finance Minister Euclid Tsakalotos’ statement that meeting existing austerity goals was correct but also demanding that tough measures for social spending be put in place.

Impeachment moves ahead in Brazil. In the latest dramatic event to unfold for the government of Brazil, lawmakers in the nation’s lower congressional house restarted an impeachment process to remove President Dilma Rousseff in a special overnight session. The move came after the leader of the lower house attempted to annual the April vote that put the impeachment process into motion. Protests in multiple cities in South America’s largest economy went on overnight.

Credit Suisse posts loss. Credit Suisse Group AG reported a loss today of more than $300 million for the first three months on 2016 as the Swiss lender continues to cut costs and refocus on wealth management. The reversal was more moderate than consensus analyst estimates and bank management indicated that it has achieved more than half of the overhead reduction on deck for 2016 by the end of the period. Capital markets, a division which prompted CEO Tidjane Thiam to pre-announce losses in March, reported setbacks in fixed income and equity trading.

China CPI weaker than forecast. At a 2.3 percent year-over-year expansion, China’s National Bureau of Statistics released headline consumer price index levels that were more muted than expected despite a nearly 7.5 percent gain in food prices versus the same month in 2015. With nonfood prices up 1.1 percent for the period, concerns over internal demand in China continue to weigh on investor sentiment.

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