Europe Plunged Into Uncertainty

Greece shuttered banks last week, as capital controls were effectively introduced with ATM’s open for a maximum disbursement of EUR 60 per day. Deposit outflows continued unabated, with banks rapidly running short of cash. Despair and disappointment reigned supreme ahead of the referendum. After calling the debt onerous, the Greeks were supported by the IMF in their assertions that the debt load was unsustainable. Greeks turned out in high numbers to reject austerity with the “no” vote collecting the most support as Europe enters a new phase of crisis. In a positive note, UK GDP experienced a notable uptick with annualized growth surging to 2.90% after first quarter growth printed at 0.40% expansion. Across the Atlantic US payrolls missed expectations despite a strong reading from ADP and the unemployment rate plunging to 5.30%. Labor force participation hit the lowest levels since 1977 with over 93.6 million Americans recorded outside the labor force. China cut interest rates again, lowering both the deposit and lending rates in an effort to stabilize the economy. Volatility continues to pick up in Chinese stocks with nearly $2.5 trillion in market capitalization wiped from Chinese stocks last week.