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Daily Agenda: Cautious Optimism for Greece

Business leaders in the U.K. prepare to push for Brexit; Carlyle makes an energy play in India; major telecom merger announced in Europe.

In advance of today’s emergency European Union meeting, the government of Greece submitted a new series of proposals to creditors over the weekend. In a media appearance, Alekos Flabouraris, Greek minister of state, insisted that the documents contained a series of new negotiating points rather than being a rehash of the two submissions made in recent weeks. Separately, EU Economic Commissioner Pierre Moscovici and a spokesperson for European Commission President Jean-Claude Juncker’s office expressed confidence that a deal could be reached today. European equity markets reacted positively to the news, and Bunds declined as hopes for a deal buoyed investor confidence. Despite the fresh optimism, analysts warn that the deal between Athens and Brussels could still collapse, leading to volatility in fixed-income markets. In a note to clients today Philippe Gudin de Vallerin, Paris–based chief European economist at Barclays, wrote that any short-term reaction to a Grexit may ultimately be manageable however, writing that “a full-scale contagion from Greece to other EGB markets similar to 2011–’12 remains unlikely, in our view.”

Chinese margin debt falls. After a significant two-day reversal in the Shanghai Composite Index, fresh figures indicated that investors in mainland China had reduced leverage significantly. According to exchange data, total outstanding margin debt contracted to 1.479 trillion ($240 billion) yuan from a prior 1.483 trillion yuan, marking the first daily decline in nearly a month. Some strategists are attributing the sell-off to tightening of lending standards by brokerages in response to unease among regulators.

EU to continue sanctions on Russia. In a summit in Luxembourg today, EU foreign ministers announced a six-month extension of economic sanctions against Russia in response to the ongoing Ukraine military crisis. The sanctions, which were set to expire in July, includes restrictions targeted at individual members of Russian President Vladimir Putin’s inner circle.

European telecom acquisition announced. Luxembourg–based multinational telecoms company Altice today revealed that it has made an offer to acquire Bouygues Telecom through Altice’s subsidiary, Numericable-SFR. Valued at roughly €10 billion ($11.3 billion), the deal to purchase France’s third-largest telecom would position Altice to become a dominant player in the nation.

U.K. business leaders push for Brexit. U.K. newspaper The Sunday Telegraph reported yesterday that a group of business leaders, including major Independent Party donor Arron Banks and property investor Richard Tice, will be financing a £20 million $31.6 million) campaign to convince voters to back a departure from the EU in the upcoming referendum. Prime Minister David Cameron supports remaining within the Union with renegotiated terms.

Kuroda rests assured bank will reach targets. In comments made today before The National Diet, the nation’s legislature, Bank of Japan governor Haruhiko Kuroda stated that he remains confident that the central bank will achieve price targets through the ongoing quantitative easing effort. He also discussed a number of options that would allow the bank to eventually exit the asset purchase facility without disrupting financial markets.

Carlyle Group makes a major play in India. Private equity giant Carlyle Group today announced that its Carlyle International Energy Partners division will make an investment of up to $500 million in Magna Energy, an oil and natural gas company operating across the Indian subcontinent that was created through a series of bolt-on acquisitions.

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