Greece has agreed to a deal to unlock a further €10.3 billion in loans from its international creditors, after talks in Brussels. Eurozone finance ministers agreed on debt relief for Greece, lengthening the repayment term and capping interest rates.

Greece required this tranche of debt relief to meet the repayments due in July. The country’s total debt burden amounts to more than €300 billion – about 180 per cent of its annual GDP which, according to the International Monetary Fund, is unsustainable. The IMF considers debt relief necessary, but Germany in particular was opposed.

Separately, a report released last week by the Commerce Department showed a substantial rebound in new home sales in April after an unexpected drop in the previous month. New home sales jumped by 16.6 per cent to an annual rate of 619,000 in April from a reviewed 531,000 in March. Economists had forecast new home sales to rise by 2.3 per cent to an incease of 523,000 from the 511,000 initially reported for the prior month.

Due to the more than the expected rise, new home sales are at their highest level since hitting 627,000 in January 2008. New home sales in the west and south of the UK also increased by 18.8 per cent and 15.8 per cent respectively, while sales in the midwest fell by 4.8 per cent.

Finally, industry data published last week showed that German economic sentiment unexpectedly dropped in May, among continuous concerns over the global economy and uncertainties linked to the ‘Brexit’ referendum.

The ZEW Indicator of Economic Sentiment for Germany showed that national economic sentiment fell by 4.8 points to 6.4 this month from April’s reading of 11.2. Economists had forecast the index to rise by 0.8 points to 12.0 in May.

The Current Conditions Index rose to 53.1 this month from 47.7 in April, exceeding expectations for a reading of 48.9. In the meantime, the index of eurozone economic sentiment fell from 21.5 in April to 16.8 in May, missing projections for 23.4. On the index, a level above zero indicates optimism, a level below zero indicates pessimism.

This report was compiled by Bank of Valletta for general information purposes only.