Posts
NEWS
02 July 2015, 10:53
SCOTIABANK: GBP IS EXPECTED TO FADE ITS BOE-DRIVEN RALLY, SOFTENING INTO
YEAR-END ON THE BACK OF RELATIVE POLICY
02 July 2015, 10:52
SCOTIABANK: WE ANTICIPATE MILD DEPRECIATION IN BOTH CAD AND MXN ON THE BACK
OF INTEREST RATE DIFFERENTIALS, MITIGATED SOMEWHAT BY THE POSITIVE IMPACT OF AN
ACCELERATING PACE OF GROWTH IN THE
2 July 2015, 10:49
A poll showed more Greeks are leaning to accept deeper cuts - against the
government’s call to vote against creditors’ terms for more aid.
“Come Monday, the Greek government will be at the negotiating table after the referendum, with better terms for the Greek people,” Tsipras said in a Twitter message posted as he spoke on national television. “A popular verdict is much stronger than the will of a government.”
If it means staying in the European Union, the majority of the country's citizens may be willing to vote against the very government they elected five months ago to take a stand against austerity.
A GPO survey cited by euro2day.gr said 47 percent of people are inclined toward a “yes” vote, with those in the “no” territory not far behind with 43 percent.
On Tuesday GPO interviewed 1,000 adults, four days after Tsipras’s call for referendum. There is a margin of error of 3.1 percentage points.
Greek Prime Minister announced a bank holiday over the weekend, and the lenders are to remain shut possibly until after the referendum.
The European Central Bank blocked their liquidity lifeline, and on Wednesday decided to keep the emergency funding at the same level.
The queue of pensioners in Athens at the few banks that are still open these days underscored the country’s plight, says Bloomberg.
At 7 a.m., a few dozen pensioners were outside a central branch of the National Bank of Greece. They were to withdraw a maximum of 120 euros ($133), compared with the average monthly payment of about 600 euros. Many received nothing after being told only those with last names from letters A to K would get paid.
“Come Monday, the Greek government will be at the negotiating table after the referendum, with better terms for the Greek people,” Tsipras said in a Twitter message posted as he spoke on national television. “A popular verdict is much stronger than the will of a government.”
If it means staying in the European Union, the majority of the country's citizens may be willing to vote against the very government they elected five months ago to take a stand against austerity.
A GPO survey cited by euro2day.gr said 47 percent of people are inclined toward a “yes” vote, with those in the “no” territory not far behind with 43 percent.
On Tuesday GPO interviewed 1,000 adults, four days after Tsipras’s call for referendum. There is a margin of error of 3.1 percentage points.
Greek Prime Minister announced a bank holiday over the weekend, and the lenders are to remain shut possibly until after the referendum.
The European Central Bank blocked their liquidity lifeline, and on Wednesday decided to keep the emergency funding at the same level.
The queue of pensioners in Athens at the few banks that are still open these days underscored the country’s plight, says Bloomberg.
At 7 a.m., a few dozen pensioners were outside a central branch of the National Bank of Greece. They were to withdraw a maximum of 120 euros ($133), compared with the average monthly payment of about 600 euros. Many received nothing after being told only those with last names from letters A to K would get paid.
02 July 2015, 10:49
DOLLAR HITS 3-WEEK HIGH OF 96.396 VS BASKET OF MAJOR CURRENCIES
02 July 2015, 10:48
RABO BANK: THE LIKELY DOWNWARD REVISION OF CANADA’S GDP GROWTH IN JULY, WOULD
LEAD TO A 25BPS RATE CUT, WHICH IS EXPECTED TO BE MADE IN Q3, MOSTLY IN JULY
02 July 2015, 10:48
Source: Thomson Reuters
- 1mth vs 3mth atm traded 0.125 for 1mth on AUD 850mln vanilla in
Asia
- Spread wider now - 1mth atm trades early London 11.65 and 3mth
11.35
- 1mth up from 10.7 (low since March) last week to a 12.7 peak
Monday
- Note 1mth expiry now captures 04 Aug RBA. Next RBA is Tuesday
- 3mth traded 11.0-11.5 between Thurs-Mon. 1yr 11.15-11.5 and now 11.225
02 July 2015, 10:41
Riksbank is facing a dilemma ahead of today's meeting. The recent inflation
data was not bad really, which would suggest leaving its monetary policy
unchanged. On the other hand the Swedish central bankers will have to ask
themselves whether sufficient autonomous inflation momentum may have been
created so that further support from an expansionary monetary policy is no
longer required.
If the support ends too quickly inflation might collapse again. All previous efforts would have been in vain and Riksbank would once again be exposed to the criticism of sado-monetarism by left-leaning US economists.
In similar situations many central banks decide in favour of a possibly excessively expansionary monetary policy, as deflation seems to be more difficult to fight than inflation. However, amongst Riksbank members this approach is unlikely to be uncontroversial.
There is still widespread fear of a bubble on the property market. "Erring on the inflationary side" which the Fed can no doubt afford seems too risky to Riksbank, says Commerzbank.
If the support ends too quickly inflation might collapse again. All previous efforts would have been in vain and Riksbank would once again be exposed to the criticism of sado-monetarism by left-leaning US economists.
In similar situations many central banks decide in favour of a possibly excessively expansionary monetary policy, as deflation seems to be more difficult to fight than inflation. However, amongst Riksbank members this approach is unlikely to be uncontroversial.
There is still widespread fear of a bubble on the property market. "Erring on the inflationary side" which the Fed can no doubt afford seems too risky to Riksbank, says Commerzbank.
02 July 2015, 10:38
SWEDISH CROWN EXTENDS LOSSES TO FALL 1 PCT ON DAY VS EURO TO 9.3700
02 July 2015, 10:35
SWEDISH C.BANK SAYS PREPARED TO INTERVENE ON FOREIGN EXCHANGE MARKET IF
UPTURN IN INFLATION IS THREATENED
02 July 2015, 10:35
SWEDISH C.BANK SAYS STILL HAS A HIGH LEVEL OF PREPAREDNESS TO MAKE MONETARY
POLICY EVEN MORE EXPANSIONARY IF NECESSARY
02 July 2015, 10:34
SWEDISH C.BANK SAYS REPO RATE IS EXPECTED TO BE AROUND -0.35 PER CENT FOR
JUST OVER A YEAR
02 July 2015, 10:34
SWEDISH CROWN HITS 3-WEEK LOW OF 9.3500 CROWNS VS EURO AFTER RIKSBANK CUTS
RATES
02 July 2015, 10:33
INDIA CBANK CHIEF RAJAN SAYS DON'T THINK WE CHANGE FOREIGN INVESTOR CAP BASED
ON INTEREST IN GOVT BOND MARKET
02 July 2015, 10:33
SWEDISH C.BANK SAYS OHLSSON CONSIDERED THAT REPO RATE AND REPO-RATE PATH
SHOULD BE HELD UNCHANGED
02 July 2015, 10:33
After this week's disappointing Canada's GDP data for April, it will be very
difficult for GDP growth in Q2 to meet the projections that the Bank of Canada
made in April. The same is true for Q1.
This means that the insurance taken out in January (a 25 bps rate cut) to cushion the negative impact of low oil prices on the Canadian economy may no longer be sufficient. The Canadian economy has shown negative GDP growth in each of the first four months of the year. On July 15, the Bank of Canada will update its projections and a downward revision for GDP growth seems likely, says Rabo bank.
This would set the stage for a 25bps rate cut. This cut is expected to be made in Q3, most likely in July. After this cut, the Bank is expected to remain on hold, added Rabo bank.
This means that the insurance taken out in January (a 25 bps rate cut) to cushion the negative impact of low oil prices on the Canadian economy may no longer be sufficient. The Canadian economy has shown negative GDP growth in each of the first four months of the year. On July 15, the Bank of Canada will update its projections and a downward revision for GDP growth seems likely, says Rabo bank.
This would set the stage for a 25bps rate cut. This cut is expected to be made in Q3, most likely in July. After this cut, the Bank is expected to remain on hold, added Rabo bank.
02 July 2015, 10:33
SWEDISH C.BANK SAYS DEPUTY GOVERNOR HENRY OHLSSON ENTERED A RESERVATION
AGAINST DECISION TO CUT REPO RATE
02 July 2015, 10:32
SWEDISH C.BANK SAYS DEVELOPMENT OF EXCHANGE RATE REMAINS A RISK TO UPTURN IN
INFLATION
02 July 2015, 10:31
SWEDISH C.BANK SAYS UNCERTAINTY ABROAD HAS INCREASED AND IT IS DIFFICULT TO
ASSESS CONSEQUENCES OF SITUATION IN GREECE
02 July 2015, 10:31
SWEDISH C.BANK CUTS KEY REPO RATE TO -0.35 PCT VS FORECAST REPO RATE ON HOLD
AT -0.25 PCT IN REUTERS POLL
02 July 2015, 10:31
SWEDISH CROWN FALLS VS EURO AFTER RIKSBANK DECISION
02 July 2015, 10:31
Though fundamentals such as monetary policy expectations are shifting in
favor of pound, pound in the short term likely to remain short.
Better than expected first quarter GDP figure (growing 2.9% y/y) failed to boost pound.
Furthermore pound has cleared key support against dollar around (1.565 area) after June PMI (51.5) surprised to downside.
Trade recommendation -
- First call was provided to go short on pound around 1.576 with stop loss around 1.582 and 1.595 area targeting 1.548 and 1.532 area. Pound is currently trading at 1.558.
Better than expected first quarter GDP figure (growing 2.9% y/y) failed to boost pound.
Furthermore pound has cleared key support against dollar around (1.565 area) after June PMI (51.5) surprised to downside.
Trade recommendation -
- One might still go short on the above trade with mention stop loss area,
however it is better to wait for the construction PMI at 8:30 GMT, since it
might provide better entry for sell. However one should remain cautious as US
NFP report is likely to add heavy volatility to dollar
leg.
- It would be better to short around 1.564-1.566 area to go short on pound. For those who are looking to play safe, might even wait for the pay roll report to pass and reconsider the trade.
- Housing and real estate sector is of immense importance to UK. So construction PMI is naturally a key figure that would be close watched by economists and market participants.
- In June UK house prices dropped by -0.2%.
- In April, construction PMI was at 55.9. Today median expectation is at 56.5 for May.
02 July 2015, 10:30
SWEDISH CENTRAL BANK - REPO RATE CUT TO -0.35 PER CENT AND PURCHASES OF
GOVERNMENT BONDS EXTENDED BY SEK 45 BILLIONS
02 July 2015, 10:30
SWEDISH HOUSE PRICES +2.0 PCT IN APR-JUN VS JAN-MAR - STATS OFFICE
02 July 2015, 10:25
INDIA CBANK CHIEF RAJAN SAYS GOVT IN DISCUSSION WITH US, THINKING OF
CAPITALISING BANKS AND THAT WILL HELP AS BUFFER
02 July 2015, 10:20
INDIA CBANK CHIEF RAJAN SAYS DIRECT EXPOSURE TO GREECE "VERY VERY" LIMITED
FOR INDIA
02 July 2015, 10:19
The pound slid lower against dollar yesterday as expected after UK
manufacturing activity data showed that it's expanded at the slowest rate in
last 2 years in June, while Greek debt issues continued to hold up demand for
the safe-haven greenback.
Today now its construction PMI's turn, it is expected to rise the surprising May election result saw a housing-friendly conservative administration come to power. This is likely to lead to a post-election increase in housing construction, which should push up the June PMI from 55.9 to 56.5.
It is a quiet day for data releases with the UK construction PMI for June the next most notable. The revisions to UK GDP published earlier this week, which were partially driven by changes to construction estimates, showed that while this sector is relatively small it can have an outsize impact on GDP.
However, it should be observed that the correlation between the PMI and the official construction output series is not always very high. We forecast a PMI rise for June.
GBP/USD hit 1.5676 during European morning trade, the pair's lowest since June 29; the pair subsequently consolidated at 1.5677, shedding 0.21%.
Today now its construction PMI's turn, it is expected to rise the surprising May election result saw a housing-friendly conservative administration come to power. This is likely to lead to a post-election increase in housing construction, which should push up the June PMI from 55.9 to 56.5.
It is a quiet day for data releases with the UK construction PMI for June the next most notable. The revisions to UK GDP published earlier this week, which were partially driven by changes to construction estimates, showed that while this sector is relatively small it can have an outsize impact on GDP.
However, it should be observed that the correlation between the PMI and the official construction output series is not always very high. We forecast a PMI rise for June.
GBP/USD hit 1.5676 during European morning trade, the pair's lowest since June 29; the pair subsequently consolidated at 1.5677, shedding 0.21%.
02 July 2015, 10:16
TURKISH ECONOMY MINISTER ZEYBEKCI SAYS DOMESTIC DEMAND TO BE KEY IN 2015
GROWTH
2 July 2015, 10:11
FED, ECB, Greece:
"The Greek Referendum will drive headlines for the near-term. We believe that divergence of monetary policies is a more powerful EUR driver than Greek risks. In this context, the timing of the first Fed rate hike (September is our call) and the ECB’s tone (the market misread the ECB’s message to get used to volatility) are more important for the euro than Greek headlines. Whilst Greek headlines and deadlines are clearly urgent, and the market implications in our view both important and not priced in the short-run, ultimately the evolution of monetary policy is in our mind more important," BofA argues.
"We remain bearish EUR/USD, but the uncertainty around the Fed is not bolstering our conviction levels. The euro’s reaction to Greek headlines has been puzzling, sometimes weakening in response to positive headlines for a deal. In part, this is because the USD is oversold. It can also be that the market does not believe that a deal will fully address Grexit risks, which in turn suggests that the ECB is likely to keep QE to be able to address periphery risks and push against a rates sell-off. This could explain the negative correlation between European equities and the Euro recently. Our view remains that tail risks in Greece are negative for the Euro," BofA adds.
Forecasts:
"We have marked-to market our Q3 EUR/USD projection, but keep our end-year projection to 1.00. This assumes that US data will improve in H2, the Fed will start hiking rates in September, the ECB will push against the recent sell-off in rates, inflation will remain below the ECB’s target path, and the market will start expecting the ECB to continue with QE after September 2016," BofA projects.
"At the same time, we expect the Fed to push against any strengthening of the USD that goes beyond what data would justify. We do not expect Grexit in our baseline, but believe that Greek risks will continue weighing on the Euro, with Grexit risks increasing as long as Greece remains in a grey zone," BofA adds.
"The Greek Referendum will drive headlines for the near-term. We believe that divergence of monetary policies is a more powerful EUR driver than Greek risks. In this context, the timing of the first Fed rate hike (September is our call) and the ECB’s tone (the market misread the ECB’s message to get used to volatility) are more important for the euro than Greek headlines. Whilst Greek headlines and deadlines are clearly urgent, and the market implications in our view both important and not priced in the short-run, ultimately the evolution of monetary policy is in our mind more important," BofA argues.
"We remain bearish EUR/USD, but the uncertainty around the Fed is not bolstering our conviction levels. The euro’s reaction to Greek headlines has been puzzling, sometimes weakening in response to positive headlines for a deal. In part, this is because the USD is oversold. It can also be that the market does not believe that a deal will fully address Grexit risks, which in turn suggests that the ECB is likely to keep QE to be able to address periphery risks and push against a rates sell-off. This could explain the negative correlation between European equities and the Euro recently. Our view remains that tail risks in Greece are negative for the Euro," BofA adds.
"We have marked-to market our Q3 EUR/USD projection, but keep our end-year projection to 1.00. This assumes that US data will improve in H2, the Fed will start hiking rates in September, the ECB will push against the recent sell-off in rates, inflation will remain below the ECB’s target path, and the market will start expecting the ECB to continue with QE after September 2016," BofA projects.
"At the same time, we expect the Fed to push against any strengthening of the USD that goes beyond what data would justify. We do not expect Grexit in our baseline, but believe that Greek risks will continue weighing on the Euro, with Grexit risks increasing as long as Greece remains in a grey zone," BofA adds.
02 July 2015, 10:11
ECB SAYS 86 MLN EUROS BORROWED USING OVERNIGHT LOAN FACILITY, 105.631 BLN
EUROS DEPOSITED
02 July 2015, 10:08
Following the strong data yesterday (ADP and ISM) the ICE dollar index broke
the 96 mark with ease. The appetite for USD longs is limited today as the
official US labour market report is due for publication today. The FX market is
more interested in the official report than in the ADP when considering the US
labour market.
US data is being discussed more intensively than volatility and the susceptibility to revisions would actually require. Economists call this "sunspot equilibrium".
The information content of the official labour market report is no doubt higher regarding the situation on the labour market than any sunspot counts. But the term describes the phenomenon well.
The market might just as well agree on random indicators. Even if everyone was to realise that they are pointless it would not make sense for the individual market participant to deviate from market habits.
US economists are similarly optimistic for the US labour market report as they had been for yesterday's ADP. If they are correct again, the US currency is likely to find further support.
"Today's data is unlikely to provide a long term USD positive effect. It is likely to constitute another sunspot, although one that attracts a lot of attention", states Commerzbank.
US data is being discussed more intensively than volatility and the susceptibility to revisions would actually require. Economists call this "sunspot equilibrium".
The information content of the official labour market report is no doubt higher regarding the situation on the labour market than any sunspot counts. But the term describes the phenomenon well.
The market might just as well agree on random indicators. Even if everyone was to realise that they are pointless it would not make sense for the individual market participant to deviate from market habits.
US economists are similarly optimistic for the US labour market report as they had been for yesterday's ADP. If they are correct again, the US currency is likely to find further support.
"Today's data is unlikely to provide a long term USD positive effect. It is likely to constitute another sunspot, although one that attracts a lot of attention", states Commerzbank.
02 July 2015, 10:04
CHINA'S CSI300 INDEX CLOSES DOWN 3.4 PCT AT 4,108.00 POINTS
02 July 2015, 10:04
CHINA SHANGHAI COMPOSITE INDEX CLOSES BELOW 4000 FOR FIRST TIME SINCE EARLY
APRIL
02 July 2015, 10:03
GERMANY'S DAX UP 0.1 PCT
02 July 2015, 10:01
SPAIN'S IBEX UP 0.2 PCT
02 July 2015, 10:01
SHANGHAI COMPOSITE INDEX CLOSES DOWN 3.5 PCT AT 3,912.77 POINTS
02 July 2015, 10:01
ITALY’S FTSE MIB FLAT AT 22,961.14 POINTS IN EARLY DEALS
02 July 2015, 10:01
BRITAIN'S FTSE 100 FLAT, FRANCE'S CAC 40 UP 0.3 PCT
02 July 2015, 10:01
SWISS SMI OPENS UP 0.30% AT 8935.50 POINTS
02 July 2015, 10:00
EUROPE'S FTSEUROFIRST 300 UP 0.1 PCT TO 1,535.07 POINTS IN EARLY DEALS
02 July 2015, 10:00
SPAIN JUNE JOBLESS FALLS 2.25 PCT M/M, BY 94,727 PEOPLE, HITS 4.12 MLN PEOPLE
- LABOUR MINISTRY
02 July 2015, 10:00
ROMANIAN PPI -2.4 PCT Y/Y IN MAY VS -2.8 PCT Y/Y IN APRIL; +0.2 PCT M/M-STATS
BOARD
02 July 2015, 09:54
The Mexican peso outperformed most regional currencies yesterday but still
ended the day losing ground vs. the USD (around 0.3%) closing at USD-MXN 15.78.
Banxico (Central Bank of Mexico) announced yesterday via a press release that
the rate-setting meeting schedule for the second half of the year has been
modified. The new schedule has been designed to incorporate all information
available up to that point with respect to a potential US Fed
action.
The fact that now Banxico will be making its own decisions right after the US Fed has met suggests that Mexico is fine tuning its strategy (and timing) to follow an eventual rate hike in the US. In essence this is not news as Banxico has been explicitly linking its domestic monetary conditions to those of the US, but it affirms Banxico's intentions of designing a reaction function and fine tuning the timing around it.
Before the new calendar was released, analysts thought that if the US Fed made a move in its September meeting, then Banxico would equalize its monetary stance in its next meeting (October), but given the new schedule, it may react as soon as September 21.
"Banxico seeks to minimize any disruption in financial markets by unnecessarily delaying a rate hike because of schedule rigidities, with this measure effectively helping to prevent such action. This should be good news for the MXN as there would not be long lasting gaps in US-Mexico interest rate differentials", states Commerzbank.
The fact that now Banxico will be making its own decisions right after the US Fed has met suggests that Mexico is fine tuning its strategy (and timing) to follow an eventual rate hike in the US. In essence this is not news as Banxico has been explicitly linking its domestic monetary conditions to those of the US, but it affirms Banxico's intentions of designing a reaction function and fine tuning the timing around it.
Before the new calendar was released, analysts thought that if the US Fed made a move in its September meeting, then Banxico would equalize its monetary stance in its next meeting (October), but given the new schedule, it may react as soon as September 21.
"Banxico seeks to minimize any disruption in financial markets by unnecessarily delaying a rate hike because of schedule rigidities, with this measure effectively helping to prevent such action. This should be good news for the MXN as there would not be long lasting gaps in US-Mexico interest rate differentials", states Commerzbank.
02 July 2015, 09:50
Not many economic dockets scheduled for today, however risk associated is
high. Focus is on NFP data from US.
Data released so far -
Data released so far -
- Australia - Trade balance improved in May to -$2.75 billion as imports dropped -4% and exports grew +1%.
- New Zealand - ANZ commodity price index dropped -3.1%.
- UK - Nationwide house prices dropped by -0.2% in June on monthly basis but up 3.3% from a year ago.
- Spain - Unemployment change to be released at 7:00 GMT. Prior -118,000, expected today -124,000.
- Euro zone - Producer price index to be released at 9:00 GMT. ECB
will release monetary policy minutes at 11:30 GMT.
- UK - Construction PMI to be released at 8:30 GMT.
- US - Data of the month is scheduled today. NFP report is scheduled at 12:30 GMT. Expected headline number is 230,000. It will be followed by ISM New York at 13:45 GMT and Factory orders at 14:00 GMT. EIA will release weekly natural gas report at 14:30 GMT.
- Australia - AIG performance of services index to be released at 23:30 GMT.
02 July 2015, 09:48
Turkish Exporters Assembly own sample suggests that Turkish exports declined
again by 6.4% y/y in June, but recovered from the -19% y/y of May, which had
been triggered by auto sector strikes.
The June data from the sample continued to show weak exports to the EU - down 5%-6% in June (vs. -21% y/y in May) - and also weak exports to Russia (down more than 30% y/y), notes Commerzbank. While the June data did confirm the anticipated rebound from auto sector strikes in May, the data are still negative for TRY, at the margin, as it highlights an extended soft-patch for Turkish exports, even while CE3 exports have been recovering in recent months.
The June data from the sample continued to show weak exports to the EU - down 5%-6% in June (vs. -21% y/y in May) - and also weak exports to Russia (down more than 30% y/y), notes Commerzbank. While the June data did confirm the anticipated rebound from auto sector strikes in May, the data are still negative for TRY, at the margin, as it highlights an extended soft-patch for Turkish exports, even while CE3 exports have been recovering in recent months.
02 July 2015, 09:46
- EUR/CAD recovered from the low of 1.3808 yesterday on account of weak crude
oil prices.
- Oil price hit two month low yesterday on US inventory data. US stockpiles
rose last week for the first time in nine weeks, according to report from
EIA.
- Technically it is facing resistance around 1.3940 and any break of would
extend gains till 1.4025/1.40533.
- On the downside weakness only below 1.3865 and break of will target 1.3800 level.
02 July 2015, 09:40
A second important macro driver in H2 should be US monetary policy, the FOMC
is expected to start the lift-off in rates, most likely in September. A Fed
tightening cycle should not be especially menacing for global financial
markets.
A first hike has been well telegraphed by the FOMC, as has the message that the rate cycle will likely be gradual. Still, it is a little hard to predict exactly how financial markets will react to a first Fed hike, and a few reasons are seen by Barclays, not to be too complacent.
First, as has been the case for some time, financial market pricing remains below the Fed's own forecast for the path of rates, though the gap has closed substantially since the end of 2014 (mainly from lower FOMC "dots"). Second, if lift-off does occur, it would be the first time in eleven years.
As a recent Wall Street Journal story highlighted, some two-thirds of current traders were not around at the start of the last Fed lift-off. Third, judging from our Global Macro Survey, the "benign" Fed scenario is already well priced: the survey shows that a small majority expects a rate hike in September, but few see Fed policy withdrawal as a major market risk.
A first hike has been well telegraphed by the FOMC, as has the message that the rate cycle will likely be gradual. Still, it is a little hard to predict exactly how financial markets will react to a first Fed hike, and a few reasons are seen by Barclays, not to be too complacent.
First, as has been the case for some time, financial market pricing remains below the Fed's own forecast for the path of rates, though the gap has closed substantially since the end of 2014 (mainly from lower FOMC "dots"). Second, if lift-off does occur, it would be the first time in eleven years.
As a recent Wall Street Journal story highlighted, some two-thirds of current traders were not around at the start of the last Fed lift-off. Third, judging from our Global Macro Survey, the "benign" Fed scenario is already well priced: the survey shows that a small majority expects a rate hike in September, but few see Fed policy withdrawal as a major market risk.
2 July 2015, 09:32
Gold prices were weaker in Asia on Thursday after finishing lower in the U.S.
session, as risk appetite among investors and traders was higher these days,
which is bullish for the stock markets but bearish for safe-haven gold.
The US dollar index was buoyed by positive U.S. data, as well as Greek jitters.
On Thursday, on the Comex division of the New York Mercantile Exchange, gold for August delivery fell 0.13% to $1,167.80 a troy ounce.
Silver for September delivery dipped 0.33% to $15.525 a troy ounce.
Copper for September delivery eased 0.06% to $2.628 a pound.
At the end of the U.S. session, August Comex gold was down $1.70 at $1,170.10 an ounce, while September Comex silver was higher $0.014 at $15.60 an ounce.
The US dollar index has recently been flat at 96.2060.
Traders and investors will now await Thursday morning’s U.S. employment report for June from the Labor Department - released one day early due to the U.S. Independence Day holiday on Friday.
The key non-farm payrolls number of the report is expected to come in at up around 230,000. Some markets could get very active immediately after the release of the report, especially if it’s a big miss on the non-farms number, says Kitco News.
The US dollar index was buoyed by positive U.S. data, as well as Greek jitters.
On Thursday, on the Comex division of the New York Mercantile Exchange, gold for August delivery fell 0.13% to $1,167.80 a troy ounce.
Silver for September delivery dipped 0.33% to $15.525 a troy ounce.
Copper for September delivery eased 0.06% to $2.628 a pound.
At the end of the U.S. session, August Comex gold was down $1.70 at $1,170.10 an ounce, while September Comex silver was higher $0.014 at $15.60 an ounce.
The US dollar index has recently been flat at 96.2060.
Traders and investors will now await Thursday morning’s U.S. employment report for June from the Labor Department - released one day early due to the U.S. Independence Day holiday on Friday.
The key non-farm payrolls number of the report is expected to come in at up around 230,000. Some markets could get very active immediately after the release of the report, especially if it’s a big miss on the non-farms number, says Kitco News.
02 July 2015, 09:30
POLAND'S C.BANK'S BOARD MEMBER RACZKO SAYS POLISH ZLOTY'S RECENT MOVES NOT
SIGNIFICANT FOR REAL ECONOMY
02 July 2015, 09:29
SPAIN'S ECONOMY MINISTER SAYS EVERYONE WANTS GREECE TO REMAIN IN THE EURO
ZONE
02 July 2015, 09:28
FRENCH FINMIN SAYS WE WANT GREECE TO STAY IN THE EURO
02 July 2015, 09:26
FRENCH FINMIN SAYS IF THE YES WINS IN REFERENDUM, WE'LL GET BACK TO WORK TO
REACH A DEAL WITH GREECE
02 July 2015, 09:25
FRENCH FINMIN SAYS IF GREEKS VOTE NO IN REFERENDUM, THAT COULD LEAD TO GREXIT
02 July 2015, 09:23
In the interest of speculators we see buying opportunities in USD/JPY binary
puts at every rise for a target of 123 levels.
Option Strategy: Credit Call Spread
Hedgers should focus on better bear spreads that offers optimal entry points.
In order to establish the above stated strategy, hedgers should focus on selling a Call option and purchase another Call at a higher Strike Price for a net credit.
A Bear Call Spread is better over short Call since it has limited risk unlike unlimited risk in case of short call.
Use a short time for maturity (something like 15 day to near month contracts bearing positive theta value) to take advantage of the time decay and give the underlying currency less time to go against you.
Buy 7D (1%) Out-Of-The-Money 0.25 delta calls and sell 7D (-1%) In-The-Money calls for net credit receivable. The combined delta should have negative delta somewhere close to -0.55 as we have shorts on ITM calls in our position.
Option Strategy: Credit Call Spread
Hedgers should focus on better bear spreads that offers optimal entry points.
In order to establish the above stated strategy, hedgers should focus on selling a Call option and purchase another Call at a higher Strike Price for a net credit.
A Bear Call Spread is better over short Call since it has limited risk unlike unlimited risk in case of short call.
Use a short time for maturity (something like 15 day to near month contracts bearing positive theta value) to take advantage of the time decay and give the underlying currency less time to go against you.
Buy 7D (1%) Out-Of-The-Money 0.25 delta calls and sell 7D (-1%) In-The-Money calls for net credit receivable. The combined delta should have negative delta somewhere close to -0.55 as we have shorts on ITM calls in our position.
02 July 2015, 09:22
FRENCH FINMIN SAYS EUROGROUP WAS UNANIMOUS IN SAYING NO DEAL POSSIBLE SINCE
GREECE CALLED FOR REFERENDUM
02 July 2015, 09:21
FRENCH FINMIN SAPIN , ABOUT GREEK GOVERNMENT, SAYS CANNOT REACH A DEAL WITH
SOMEONE WHO SAYS NO - ITELE
02 July 2015, 09:15
For today, intraday technical charts suggest little sideways to downward and
an indication of little weakness in this pair on EOD charts as we traced a gap
down opening with a spinning top candle pattern and more evidently these price
patterns have been substantiated with abundant volumes. And in addition we
believe it is testing support at 123.12 & at 122.50 levels if it manages to
break these levels then we see all chances dragging until 122 levels back
again.
The Gravestone Doji and shooting stars appeared on a market top and the next candle after doji also falls to the downside, it is a strong confirmation that the earlier doji's signal of market topping would sustain.
Oscillating indicators such as RSI (14) and slow stochastic curves are moving in convergence with prevailing price patterns.
RSI currently oscillating at 60.0323 while %D line cross over at above 80 levels on slow stochastic which is not that significant for both bulls and bears.
We look at either shorting futures for pair to hit targets of 123.10 & then even 122.80 levels or buying at binary puts for the same targets with a strict stop loss at 123.50. Thereby risk reward ratio would be at 0.33.
The Gravestone Doji and shooting stars appeared on a market top and the next candle after doji also falls to the downside, it is a strong confirmation that the earlier doji's signal of market topping would sustain.
Oscillating indicators such as RSI (14) and slow stochastic curves are moving in convergence with prevailing price patterns.
RSI currently oscillating at 60.0323 while %D line cross over at above 80 levels on slow stochastic which is not that significant for both bulls and bears.
We look at either shorting futures for pair to hit targets of 123.10 & then even 122.80 levels or buying at binary puts for the same targets with a strict stop loss at 123.50. Thereby risk reward ratio would be at 0.33.
2 July 2015, 09:09
Chinese shares slid Thursday as Beijing’s fresh measures to stabilize falling
equity markets failed to restrain selling.
Other Asian shares were higher, however, as European markets recovered and investor confidence stabilized.
The Shanghai Composite fell 3.4%.
The smaller Shenzhen market was lower 4.2%.
The ChiNext board, composed of small-cap stocks, fell 2%.
Nearly three weeks of volatile trading has removed some gains from a yearlong rally. Thus, China's authorities have taken steps in recent days to underpin investor confidence, from pumping cash into the financial system to cutting interest rates.
However, even after recent declines, China’s main stock market has almost doubled in value over the past year.
On Wednesday, after sharp stock selloffs, the Shanghai and Shenzhen stock exchanges lowered fees on securities transactions by about a third. Both the Shanghai Composite and the Shenzhen Composite are now in the red territory, down more than 20% from recent highs.
Also yesterday, the China Securities Regulatory Commission amended
regulations governing stock purchases funded by borrowed money.
This move was directed to limiting the forced selling of shares as losses incur. Such selling has added pressure to an already battered market in recent weeks. Margin trading has stimulated much of the increase in China’s stock prices over the past year.
The CSRC cancelled rules that made brokers recall loans of customers whose leverage exceeds maximum levels, allowing them instead to negotiate rollovers of loans directly with clients, state media resource Xinhua reported.
ING analysts wrote in a research report that the CSRC move will bring forward the point at which enough leverage has been bled out of the system for the rally to resume.
On Thursday Asian stocks climbed in early trading after European markets
stabilized a day earlier amid recovering investor confidence, although the
atmosphere around Greece is still quite nervous.
Japan’s Nikkei 225 Stock Average climbed 1.2%.
Australia’s S&P/ASX 200 index rose 0.8%.
South Korea’s Kospi Composite was higher 0.3%.
The Hang Seng Index was last up 0.2%. Hong Kong listings of Chinese companies, known as H-shares, dropped 1.5%.
EUR/USD was last at 1.1065 higher 0.10%.
USD/JPY was 0.20% higher to trade at 123.43.
The greenback was supported overnight after the release of upbeat U.S. jobs and manufacturing data.
Other Asian shares were higher, however, as European markets recovered and investor confidence stabilized.
The Shanghai Composite fell 3.4%.
The smaller Shenzhen market was lower 4.2%.
The ChiNext board, composed of small-cap stocks, fell 2%.
Nearly three weeks of volatile trading has removed some gains from a yearlong rally. Thus, China's authorities have taken steps in recent days to underpin investor confidence, from pumping cash into the financial system to cutting interest rates.
However, even after recent declines, China’s main stock market has almost doubled in value over the past year.
On Wednesday, after sharp stock selloffs, the Shanghai and Shenzhen stock exchanges lowered fees on securities transactions by about a third. Both the Shanghai Composite and the Shenzhen Composite are now in the red territory, down more than 20% from recent highs.
CSRC
Also yesterday, the China Securities Regulatory Commission amended
regulations governing stock purchases funded by borrowed money. This move was directed to limiting the forced selling of shares as losses incur. Such selling has added pressure to an already battered market in recent weeks. Margin trading has stimulated much of the increase in China’s stock prices over the past year.
The CSRC cancelled rules that made brokers recall loans of customers whose leverage exceeds maximum levels, allowing them instead to negotiate rollovers of loans directly with clients, state media resource Xinhua reported.
ING analysts wrote in a research report that the CSRC move will bring forward the point at which enough leverage has been bled out of the system for the rally to resume.
Other Asia
On Thursday Asian stocks climbed in early trading after European markets
stabilized a day earlier amid recovering investor confidence, although the
atmosphere around Greece is still quite nervous.Japan’s Nikkei 225 Stock Average climbed 1.2%.
Australia’s S&P/ASX 200 index rose 0.8%.
South Korea’s Kospi Composite was higher 0.3%.
The Hang Seng Index was last up 0.2%. Hong Kong listings of Chinese companies, known as H-shares, dropped 1.5%.
EUR/USD was last at 1.1065 higher 0.10%.
USD/JPY was 0.20% higher to trade at 123.43.
The greenback was supported overnight after the release of upbeat U.S. jobs and manufacturing data.
02 July 2015, 09:08
BMO ECONOMICS: ISM INDEX CONFIRMS U.S. ECONOMY IS SHAKING-OFF ITS "SOFT
PATCH" SHACKLES AND KEEPING THE FED ON TRACK TO HIKE RATES LATER YEAR
02 July 2015, 09:05
SHANGHAI COMPOSITE INDEX DOWN OVER 4 PCT
02 July 2015, 09:05
The US unemployment rate data for June is due on today.
Societe Generale estimates, the unemployment rate likely to decline from 5.5% to 5.4%, which would reverse the unexpected uptick in May and put it back at the cyclical low first registered in April.
According to the bank, the labour market is nearing full employment which should mark an inflection point on wage growth. The ECI survey is already showing evidence of a build-up of wage pressures, but the monthly data on average hourly earnings tends to lag.
"Despite our bullish outlook for wage growth, we expect the June data to be subdued, with AHE rising by just 0.1% m/m. Our forecast reflects the early survey week (which ended on the 13th of the month) and some payback effects for the 0.3% m/m increase reported for May. If our forecast is correct, the yoy growth rate will decline from 2.3% to 2.2%", estimates Societe Generale.
Societe Generale estimates, the unemployment rate likely to decline from 5.5% to 5.4%, which would reverse the unexpected uptick in May and put it back at the cyclical low first registered in April.
According to the bank, the labour market is nearing full employment which should mark an inflection point on wage growth. The ECI survey is already showing evidence of a build-up of wage pressures, but the monthly data on average hourly earnings tends to lag.
"Despite our bullish outlook for wage growth, we expect the June data to be subdued, with AHE rising by just 0.1% m/m. Our forecast reflects the early survey week (which ended on the 13th of the month) and some payback effects for the 0.3% m/m increase reported for May. If our forecast is correct, the yoy growth rate will decline from 2.3% to 2.2%", estimates Societe Generale.
02 July 2015, 09:00
UNITED KINGDOM JUN NATIONWIDE HOUSE PRICE YY DECREASE TO +3.3 % (FCAST 4.3 %)
VS PREV 4.6 %
02 July 2015, 09:02
SOUTH KOREAN WON UNOFFICIALLY CLOSES ONSHORE TRADE AT 1,125.0 PER DOLLAR VS
1,117.5 AT PREVIOUS CLOSE
02 July 2015, 09:01
GERMAN BUND FUTURES OPEN 28 TICKS LOWER AT 151.28
02 July 2015, 09:01
EUROSTOXX 50 FUTURES FLAT, DAX FUTURES UP 0.1 PCT, CAC 40 FUTURES DOWN 0.1
PCT, FTSE FUTURES DOWN 0.2 PCT
02 July 2015, 09:00
UNITED KINGDOM JUN NATIONWIDE HOUSE PRICE YY DECREASE TO +3.3 % (FCAST 4.3 %)
VS PREV 4.6 %
02 July 2015, 09:00
UNITED KINGDOM JUN NATIONWIDE HOUSE PRICE MM DECREASE TO -0.2 % (FCAST 0.5 %)
VS PREV +0.2 % (REVISED FROM 0.3 %)
02 July 2015, 09:00
SEOUL UNOFFICIALLY CLOSE UP 0.48 PCT
02 July 2015, 09:00
TOKYO'S NIKKEI AVERAGE UNOFFICIALLY CLOSES UP 0.95 PCT AT 20,522.50
02 July 2015, 09:00
AUSTRALIA'S S&P/ASX 200 INDEX UNOFFICALLY CLOSES UP 1.44 PCT AT 5,595.10
POINTS
02 July 2015, 08:59
10-YEAR U.S. TREASURY YIELD AT 2.425 PERCENT VS U.S. CLOSE OF 2.418 PERCENT
ON WEDNESDAY
02 July 2015, 08:46
Australia's retain sales data for May is scheduled to release on 3rd,
July.
Despite stagnating in April, an expansion in May retail sales is expected, but merely in line with trend at 0.3% mom (identical to the average gain in 2014 and over the past five years), states Societe Generale.
Nevertheless, this would raise the gain to 4.8% yoy from 4.1% in April, indicating that while not exactly buoyant, there is not much wrong with retail sales in Australia. In fact, given that disposable income growth in Q1 was a mere 2.6% yoy, the pace of retail sales growth is remarkably strong (though the degree of weakness in disposable income growth is unlikely to persist in our view).
"Specifically in May, food sales are likely to have recovered after an atypical outright decline in April (and they account for about 40% of all sales), but apparel sales are likely to have eased back after very large increases in March and April. The second largest sector, household goods, is expected to have expanded marginally, thus maintaining recent strength. Catering is also expected to continue to show solid growth", adds Societe Generale.
Despite stagnating in April, an expansion in May retail sales is expected, but merely in line with trend at 0.3% mom (identical to the average gain in 2014 and over the past five years), states Societe Generale.
Nevertheless, this would raise the gain to 4.8% yoy from 4.1% in April, indicating that while not exactly buoyant, there is not much wrong with retail sales in Australia. In fact, given that disposable income growth in Q1 was a mere 2.6% yoy, the pace of retail sales growth is remarkably strong (though the degree of weakness in disposable income growth is unlikely to persist in our view).
"Specifically in May, food sales are likely to have recovered after an atypical outright decline in April (and they account for about 40% of all sales), but apparel sales are likely to have eased back after very large increases in March and April. The second largest sector, household goods, is expected to have expanded marginally, thus maintaining recent strength. Catering is also expected to continue to show solid growth", adds Societe Generale.
02 July 2015, 08:44
SHANGHAI COMPOSITE INDEX DOWN OVER 3 PCT, CSI 300 INDEX DOWN OVER 2 PCT
02 July 2015, 08:43
INDONESIA'S C.BANK SAYS FIRST HALF 2015 CREDIT GROWTH AT AROUND 11 PCT
02 July 2015, 08:42
- USD/JPY jumped till 123.45 and is currently trading at 123.37. Overall trend is bullish and further short term weakness can be seen only below 123.
- The pair's short term resistance is around 123.50 (20 day MA) and break above would extend gains till 124.15/124.40.
- On the downside any break below 123 will drag the pair further down till 122.70/122.40/122.
02 July 2015, 08:40
WESTPAC: IN Q2, AUSTRALIA’S NET EXPORTS WILL BE CONSIDERABLY LESS FAVOURABLE,
WITH A POTENTIALLY NEUTRAL IMPACT
02 July 2015, 08:40
TD ECONOMICS: GROWTH IN US CONSUMER SPENDING ON DURABLES IS LIKELY TO
ACCELERATE FROM 2.1% IN Q1 TO ROUGHLY 3% IN Q2
02 July 2015, 08:37
BARCLAYS: GLOBAL MANUFACTURING OUTPUT SHOULD SHOW AN IMPROVEMENT IN UPCOMING
MONTHS, GIVEN SIGNS OF GROWTH STABILIZATION IN CHINA AND BRIGHTER OUTLOOKS
ELSEWHERE IN ASIA (EM AND JAPAN) FOR H2
02 July 2015, 08:36
BANK OF AMERICA: US FUNDAMENTAL EXCHANGE RATE MODELS SUPPORT CURRENT ACCOUNT
BALANCES AND USD STRENGTH AS WELL
02 July 2015, 08:35
Inflation acceleration continued in Q2 despite the likelihood that
adjustments to the prices of regulated goods and services are nearly over. The
bulk of the upside surprise in May and June (based on the IPCA-15 release
through mid-June) was driven by a higher-thanexpected rise in food prices,
although inflation also continued to accelerate in the housing and
transportation segments. While housing inflation will likely tick above 18% yoy
in June, food inflation likely entered into double digits after a gap of 21
months, said Societe Generale in a report on Thursday.
Higher food price inflation has been surprising given the decline in global agricultural prices but probably reflects the serious effects of drought in several regions. Finally, transportation inflation has averaged nearly 7% this year compared with average inflation of 2.2% in this segment since the beginning of 2012. Given the recent most trends in the key components, and particularly in food prices, the upside risks to the near-term inflation trajectory have risen further above the recently revised 2015 inflation forecast of 8.4%, says Societe Generale.
Higher food price inflation has been surprising given the decline in global agricultural prices but probably reflects the serious effects of drought in several regions. Finally, transportation inflation has averaged nearly 7% this year compared with average inflation of 2.2% in this segment since the beginning of 2012. Given the recent most trends in the key components, and particularly in food prices, the upside risks to the near-term inflation trajectory have risen further above the recently revised 2015 inflation forecast of 8.4%, says Societe Generale.
02 July 2015, 08:33
TAIWAN STOCKS CLOSE FLAT AT 9,379.24
02 July 2015, 08:33
RBI SAYS ACCEPTS ALL 9 BIDS FOR 24.97 BLN RUPEES AT 1-DAY REPO AUCTION
02 July 2015, 08:31
Market Roundup
EUR/USD is supported below 1.1100 levels and currently trading at 1.1068 levels. It has made intraday high at 1.1076 and low at 1.1031 levels. The pair is following a downward trajectory, as the news that Greek PM Tsipras accepted the majority of the creditors' last proposal fades continuously away. Yesterday US ISM manufacturing index for June ticked higher to 53.5, from 52.8 in May and beat analysts' expectations. The June ADP data came out stronger than expected, showing job gains of 237K (consensus 218K) with the May print revised slightly higher to 203K. The pair was dropping on Wednesday, with the sell-off fuelled mainly by solid US figures and Greece's chaotic situation. However, the most crucial data will come on Thursday with the release of non-farm payrolls, the unemployment rate and jobless claims. Later in the session, ECB's Governor Mario Draghi is expected to speak. Initial support is seen around 1.0952 and resistance is seen around 1.1218 levels.
USD/JPY is supported above 123.00 levels and posted a high of 123.45 levels. It has made intraday low at 123.12 and currently trading at 123.32 levels. Pair has been better bid at the start of the month, moving decisively to the upside from the off in Europe all the way through to the US and Asian handover. Tokyo has seen an initial bid and a few pips of a waver here or there, leaving the yen in supply and a positive tone around the greenback. Near term resistance is seen at 124.57 and support is seen at 121.48 levels.
GBP/USD is supported around $1.5600 levels. It made an intraday high at 1.5616 and low at 1.5597 levels. Pair is currently trading at 1.5614 levels. The British sterling fell deeper into the negative territory as the buck struck amid a sluggish factory update in the UK, while US labour and manufacturing provided the necessary strength to maintain the conquered position. Today market will eye on UK construction PMI data as well as US NFP job data for the further direction. Initial support is seen at 1.5600 and resistance is seen around 1.5737 levels.
USD/CHF is supported above 0.9400 levels and trading at 0.9461 levels and made intraday low at 0.9459 and high at 0.9488 levels. Yesterday Switzerland released manufacturing PMI data at 50.00 with market expectations only vs 49.4 previous release. Apart from that US released ADP job data and ISM manufacturing PMI with positive numbers. CHF is depreciating after the data released and now market will eye on US NFP job data for the further direction of the parity. Near term support is seen at 0.9279 levels and resistance is seen at 0.9542 levels.
AUD/USD is supported below 0.7700 levels and trading at 0.7650 levels. It has made intraday high at 0.7656 levels and low at 0.7628 levels. Pair was a minor offer in Tokyo's progression on a better bid greenback and then the Aussie's negative trade balance. Australia's international trade balance remains in the red with a deficit of $2.75 billion in May, larger than the $2.25 million deficit expected by economists. The release of US NFP job data could be very influential for the greenback and would impact on AUD$ too. Initial support is seen at 0.7568 and resistance at 0.7838 levels.
- BOJ Tankan - Japan firms eye CPI +1.4% in year, +1.5% in three, +1.6% in five, previous survey +1.4%, +1.6%, +1.6%, still short of BOJ's 2% target.
- Japan MoF flow data week-ended June 27 - Japanese buy net Y234.0 bln foreign stocks, sell Y45.2 bln bonds, Y64.6 bln bills; foreign investors buy net Y298.2 bln Japanese stocks, sell trln bonds, Y250.9 bln bills.
- Japan June monetary base +33.5% to new record high, trln.
- China PBOC steps up injection despite improving liquidity.
- Fed, industry at odds over bond market liquidity.
- US June auto sales 17.16 mln AR, Toyota sees US industry sales at highest since '05.
- IMF Lagarde - Greece must reform before getting debt relief.
- Australia May trade deficit A$2.751 bln, A$2.2 bln eyed, exports +1% m/m, imports -4%.
- NZ June ANZ commodity price index -3.1% m/m, -19.7% y/y, three-year low.
- NZ Fonterra GDT price index -5.9% but volumes up at latest auction.
- (0430 ET/ 0830 GMT) UK June construction PMI, 56.5 eyed; last 55.9.
- (0500 ET/0900 GMT) Euro zone May producer prices, +0.1% m/m, -2.0% y/y eyed; last -0.1%, -2.2%.
- (0830 ET/1230 GMT) US Jun non-farm payrolls, +230k eyed; last +280k.
- (08300 ET/1230 GMT) US June unemployment, 5.4% eyed; last 5.5%, participation 62.9%.
- (08300 ET/1230 GMT) US June average earnings, +0.2% m/m eyed; last +0.3%.
- (08300 ET/1230 GMT) US June average workweek, 34.5 hrs eyed; last 34.5 hrs.
- (08300 ET/1230 GMT) US weekly initial jobless claims, 270k eyed; last 271k.
- (0945 ET/1345 GMT) US June New York ISM index; last 683.7.
- (1000 ET/1400 GMT) US May factory orders, -0.5% m/m eyed; last -0.4%, ex-transport unchanged.
- (0330 ET/0730 GMT) Riksbank policy announcement, no change in -0.25% repo rate eyed.
- (0330 ET/0730 GMT) EU/Dutch FinMin Dijsselbloem parliamentary testimony at The Hague.
- (0405 ET/0805 GMT) BOE Gracie speech at London cyber-security conference.
- (0430 ET/0830 GMT) Spain E2.5-3.5 bln 3.75/1.15/1.6% 2018/20/25 Bono auctions.
- (0430 ET/0830 GMT) Spain E250-750 mln 1.0% 2030 index-linked Bono auction.
- (0450 ET/0850 GMT) France E7-8 bln 0.5/4.75/4.5% 2025/35/41 OAT auctions.
- (0630 ET/1030 GMT) UK DMO bln 2.0% 2020 Gilt auction.
- (1110 ET/1510 GMT) ECB Pres Draghi at T2S Milan event/17:00 ECB Mersch speech.
EUR/USD is supported below 1.1100 levels and currently trading at 1.1068 levels. It has made intraday high at 1.1076 and low at 1.1031 levels. The pair is following a downward trajectory, as the news that Greek PM Tsipras accepted the majority of the creditors' last proposal fades continuously away. Yesterday US ISM manufacturing index for June ticked higher to 53.5, from 52.8 in May and beat analysts' expectations. The June ADP data came out stronger than expected, showing job gains of 237K (consensus 218K) with the May print revised slightly higher to 203K. The pair was dropping on Wednesday, with the sell-off fuelled mainly by solid US figures and Greece's chaotic situation. However, the most crucial data will come on Thursday with the release of non-farm payrolls, the unemployment rate and jobless claims. Later in the session, ECB's Governor Mario Draghi is expected to speak. Initial support is seen around 1.0952 and resistance is seen around 1.1218 levels.
USD/JPY is supported above 123.00 levels and posted a high of 123.45 levels. It has made intraday low at 123.12 and currently trading at 123.32 levels. Pair has been better bid at the start of the month, moving decisively to the upside from the off in Europe all the way through to the US and Asian handover. Tokyo has seen an initial bid and a few pips of a waver here or there, leaving the yen in supply and a positive tone around the greenback. Near term resistance is seen at 124.57 and support is seen at 121.48 levels.
GBP/USD is supported around $1.5600 levels. It made an intraday high at 1.5616 and low at 1.5597 levels. Pair is currently trading at 1.5614 levels. The British sterling fell deeper into the negative territory as the buck struck amid a sluggish factory update in the UK, while US labour and manufacturing provided the necessary strength to maintain the conquered position. Today market will eye on UK construction PMI data as well as US NFP job data for the further direction. Initial support is seen at 1.5600 and resistance is seen around 1.5737 levels.
USD/CHF is supported above 0.9400 levels and trading at 0.9461 levels and made intraday low at 0.9459 and high at 0.9488 levels. Yesterday Switzerland released manufacturing PMI data at 50.00 with market expectations only vs 49.4 previous release. Apart from that US released ADP job data and ISM manufacturing PMI with positive numbers. CHF is depreciating after the data released and now market will eye on US NFP job data for the further direction of the parity. Near term support is seen at 0.9279 levels and resistance is seen at 0.9542 levels.
AUD/USD is supported below 0.7700 levels and trading at 0.7650 levels. It has made intraday high at 0.7656 levels and low at 0.7628 levels. Pair was a minor offer in Tokyo's progression on a better bid greenback and then the Aussie's negative trade balance. Australia's international trade balance remains in the red with a deficit of $2.75 billion in May, larger than the $2.25 million deficit expected by economists. The release of US NFP job data could be very influential for the greenback and would impact on AUD$ too. Initial support is seen at 0.7568 and resistance at 0.7838 levels.
2 July 2015, 08:26
On Tuesday Athens missed the deadline for a €1.5bn ($1.7bn) payment to the
International Monetary Fund (IMF).
Greece no longer has access to billions of euros in funds, as the previous eurozone bailout expired.
IMF head Christine Lagarde said the fund would still try to help and that she hoped the referendum would bring "more clarity".
At a referendum to be held on Sunday July 5, the Greek will be asked to either accept or reject proposals made by creditors last week, with Prime Minister Alexis Tsipras urging a "No" vote.
Finance Minister Yanis Varoufakis said creditors are blackmailing Greece.
But he pledged a deal would be reached soon after the vote and that current limits on bank withdrawals would ease.
Earlier on Wednesday Mr Tsipras put new proposals to eurozone creditors, accepting most of what was on the table before talks with creditors collapsed last week, but with conditions.
His latest offer is tied explicitly to agreement on a request for a third bailout from the eurozone's bailout fund lasting two years and amounting to €29.1bn. However, Dutch Finance Minister and Eurogroup President Jeroen Dijsselbloem commented that a new bailout package could only be discussed "after and on the basis of the outcome of" the vote.
German Chancellor Angela Merkel insisted further negotiations are possible only after the outcome of the vote.
However, French President Francois Hollande said he wanted a deal to be found before the referendum.
The Greek authorities had to imposed capital controls over the weekend, and bank banks did not open this week after the European Central Bank blocked their liquidity lifeline, and on Wednesday decided to keep the emergency funding at the same level.
But the regulator did not decide to demand more collateral from Greek banks as some had speculated it might.
Cash withdrawals are now capped at just €60 a day but some bank branches reopened on Wednesday to allow pensioners - many of whom do not use bank cards - a one-off weekly withdrawal of up to €120, says BBC News.
Overnight, U.S. stocks edged higher on the first day of trading of the second half of the year, ahead of Greece's referendum and of Thursday's release of the U.S. jobs report for June.
The Dow Jones Industrial Average and NASDAQ Composite each rose moderately, driven by gains in Apple Inc while the S&P 500 moved higher one session after ending a quarter in negative territory for the first time in more than two years.
Greece no longer has access to billions of euros in funds, as the previous eurozone bailout expired.
IMF head Christine Lagarde said the fund would still try to help and that she hoped the referendum would bring "more clarity".
At a referendum to be held on Sunday July 5, the Greek will be asked to either accept or reject proposals made by creditors last week, with Prime Minister Alexis Tsipras urging a "No" vote.
Finance Minister Yanis Varoufakis said creditors are blackmailing Greece.
But he pledged a deal would be reached soon after the vote and that current limits on bank withdrawals would ease.
Earlier on Wednesday Mr Tsipras put new proposals to eurozone creditors, accepting most of what was on the table before talks with creditors collapsed last week, but with conditions.
His latest offer is tied explicitly to agreement on a request for a third bailout from the eurozone's bailout fund lasting two years and amounting to €29.1bn. However, Dutch Finance Minister and Eurogroup President Jeroen Dijsselbloem commented that a new bailout package could only be discussed "after and on the basis of the outcome of" the vote.
German Chancellor Angela Merkel insisted further negotiations are possible only after the outcome of the vote.
However, French President Francois Hollande said he wanted a deal to be found before the referendum.
The Greek authorities had to imposed capital controls over the weekend, and bank banks did not open this week after the European Central Bank blocked their liquidity lifeline, and on Wednesday decided to keep the emergency funding at the same level.
But the regulator did not decide to demand more collateral from Greek banks as some had speculated it might.
Cash withdrawals are now capped at just €60 a day but some bank branches reopened on Wednesday to allow pensioners - many of whom do not use bank cards - a one-off weekly withdrawal of up to €120, says BBC News.
Owners of the Greek debt (in euros)
Source: BBC News
Lenders' proposals, key points
- VAT (sales tax): Greek PM accepts a new three-tier system, but wants to keep 30% discount on the Greek islands' VAT rates. Lenders want the islands' discounts removed.
- Pensions: Ekas top-up grant for some 200,000 poorer pensioners will be gradually reduced by 2020 - as demanded by lenders. But Mr Tsipras says no to immediate Ekas cut for the wealthiest 20% of Ekas recipients
- Defence: Mr Tsipras says reduce ceiling for military spending by €200m in 2016 and €400m in 2017. Lenders call for €400m reduction - no mention of €200m
Overnight, U.S. stocks edged higher on the first day of trading of the second half of the year, ahead of Greece's referendum and of Thursday's release of the U.S. jobs report for June.
The Dow Jones Industrial Average and NASDAQ Composite each rose moderately, driven by gains in Apple Inc while the S&P 500 moved higher one session after ending a quarter in negative territory for the first time in more than two years.
02 July 2015, 08:21
BANK OF ENGLAND'S CUNLIFFE SAYS SITUATION IN GREECE IS "VERY DANGEROUS" - BBC
02 July 2015, 08:18
The BLS is expected to report that US nonfarm payrolls expanded by 210k in
June, but broadly in line with the YTD average of 217k. Although job openings
rose to a new record high in April, jobless claims suggest that the pace of job
gains slowed somewhat in June.
Initial jobless claims averaged at 277k during the four weeks leading to the June establishment survey week, up from 267k during the preceding month which suggest marginally weaker labour market conditions.
Moreover, continuing claims increased by 21k between the two relevant survey weeks. This marks the first increase since March when continuing claims rose by 44k and nonfarm payrolls increased by just 119k.
To be sure, 210k increase in payrolls projected would be strong enough to reduce the unemployment rate and thus mark further progress on the labour market, consistent with the Fed's stated condition for a lift-off in rates, says Societe Generale.
Initial jobless claims averaged at 277k during the four weeks leading to the June establishment survey week, up from 267k during the preceding month which suggest marginally weaker labour market conditions.
Moreover, continuing claims increased by 21k between the two relevant survey weeks. This marks the first increase since March when continuing claims rose by 44k and nonfarm payrolls increased by just 119k.
To be sure, 210k increase in payrolls projected would be strong enough to reduce the unemployment rate and thus mark further progress on the labour market, consistent with the Fed's stated condition for a lift-off in rates, says Societe Generale.
02 July 2015, 08:12
Assuming the same IP rate sustains as per first four months for the rest of
the year, Brazil's supply side economic activity index should fall by -1.5% in
2015. However, year-to-date economic activity has collapsed slightly more than
predicted by the model and continues to add to the downside risks to our growth
forecast although economy might do slightly better in H2.
"Given the trends in trade and the initial survey-based releases, IP is expected to decline by -6.8% yoy in May leaving the year-to-date collapse unchanged at 6.4%. IP is expected to post yet another significant decline in May (-0.7% mom). These numbers are broadly in line with the Q2 growth estimate of -7.9% qoq (at an annualized rate)", forecats Societe Generale.
Given these sequential growth rates, IP growth in Q2 could be worse than in Q1 on sequential and seasonally-adjusted terms. Industrial production declined by 3.2% in 2014 after modest growth of 2.1% in 2013. This was mainly the result of the manufacturing sector's lack of competitiveness (reflected in Brazil's falling external balance) and, more recently, falling domestic demand.
While the BRL has depreciated significantly over the past few quarters not withstanding recent appreciation, further heavy depreciation is probably the only realistic way to improve competitiveness in the medium term and revive Brazilian manufacturing.
"Given the trends in trade and the initial survey-based releases, IP is expected to decline by -6.8% yoy in May leaving the year-to-date collapse unchanged at 6.4%. IP is expected to post yet another significant decline in May (-0.7% mom). These numbers are broadly in line with the Q2 growth estimate of -7.9% qoq (at an annualized rate)", forecats Societe Generale.
Given these sequential growth rates, IP growth in Q2 could be worse than in Q1 on sequential and seasonally-adjusted terms. Industrial production declined by 3.2% in 2014 after modest growth of 2.1% in 2013. This was mainly the result of the manufacturing sector's lack of competitiveness (reflected in Brazil's falling external balance) and, more recently, falling domestic demand.
While the BRL has depreciated significantly over the past few quarters not withstanding recent appreciation, further heavy depreciation is probably the only realistic way to improve competitiveness in the medium term and revive Brazilian manufacturing.
02 July 2015, 08:05
Inflation has been on an upward trajectory since 2009 (for a number of
structural reasons - labour market rigidities and low productivity growth, low
domestic savings and fiscal profligacy).
Even after assuming that real interest rates will not fall from their current levels and that the output gap will widen sharply starting in Q2, estimates Societe Generale. The medium-term inflation trajectory appears closely dependent on the BRL movement and the current inflation and/or inflation expectations (which are shaped by the current inflation, the fiscal trajectory, the BRL movement and the perception about the BCB's ability to contain inflation). Upside risk to inflation also implies upside risks to peak Selic rate.
"Despite the possibility of the base effect leading to inflation moderation in 2016 (current forecast is 6.3%), we note that structurally higher prices would be difficult to tame in such a short timespan particularly when the BRL remains under pressure due to domestic and external reasons and trend inflation is already threatening to surpass the BCB's target ceiling. Given this situation, the upside risks to our cyclically peak Selic rate forecast of 14.50% continue to rise", says Societe Generale.
Even after assuming that real interest rates will not fall from their current levels and that the output gap will widen sharply starting in Q2, estimates Societe Generale. The medium-term inflation trajectory appears closely dependent on the BRL movement and the current inflation and/or inflation expectations (which are shaped by the current inflation, the fiscal trajectory, the BRL movement and the perception about the BCB's ability to contain inflation). Upside risk to inflation also implies upside risks to peak Selic rate.
"Despite the possibility of the base effect leading to inflation moderation in 2016 (current forecast is 6.3%), we note that structurally higher prices would be difficult to tame in such a short timespan particularly when the BRL remains under pressure due to domestic and external reasons and trend inflation is already threatening to surpass the BCB's target ceiling. Given this situation, the upside risks to our cyclically peak Selic rate forecast of 14.50% continue to rise", says Societe Generale.
02 July 2015, 08:00
UK construction PMI peaked at a high level in 2014, driven by a surge in
housing construction. That has cooled, as has the temporary surge in
infrastructure constructionfuelled by a need to rebuild flood defences in parts
of southern England.
"But the shock May election result saw a housing-friendly Conservative administration come to power. This should lead to a post-election increase in housing construction which should push up the PMI from 55.9 to 56.5", states Societe Generale.
"But the shock May election result saw a housing-friendly Conservative administration come to power. This should lead to a post-election increase in housing construction which should push up the PMI from 55.9 to 56.5", states Societe Generale.
02 July 2015, 08:00
BOE'S CUNLIFFE SAYS THERE ARE SIGNS THAT UK PRODUCTIVITY IS IMPROVING - BBC
02 July 2015, 07:58
BOE'S CUNLIFFE SAYS HSBC DECISION ON WHETHER TO LEAVE UK IS A BUSINESS ONE,
NOT DRIVEN BY REGULATION - BBC
02 July 2015, 07:53
BANK OF ENGLAND DEPUTY GOVERNOR CUNLIFFE SAYS SEES NO SIGN OF CONTAGION FROM
GREECE TO OTHER PERIPHERAL EURO ZONE COUNTRIES - BBC
02 July 2015, 07:46
Australia's trade deficit narrowed to $2.8bn in May, from a revised $4.1bn
deficit in April. For the June quarter, the trade deficit could approach
$10bn.
That would be a more than $5bn deterioration on a $4.5bn deficit for the March quarter. That is a sizeable quarter on quarter deterioration and will represent a headwind to growth in the period.
The terms of trade fell further in Q2, potentially exceeding the 3% fall in Q1. This would continue to squeeze incomes and constrain spending power across the economy. Net exports were a sizeable positive in Q1, adding 0.5ppts to Q1 GDP growth, with export volumes expanding by 5%.
However, in Q2, net exports will be considerably less favourable, with a potentially broadly neutral impact, says Westpac.
That would be a more than $5bn deterioration on a $4.5bn deficit for the March quarter. That is a sizeable quarter on quarter deterioration and will represent a headwind to growth in the period.
The terms of trade fell further in Q2, potentially exceeding the 3% fall in Q1. This would continue to squeeze incomes and constrain spending power across the economy. Net exports were a sizeable positive in Q1, adding 0.5ppts to Q1 GDP growth, with export volumes expanding by 5%.
However, in Q2, net exports will be considerably less favourable, with a potentially broadly neutral impact, says Westpac.
02 July 2015, 07:42
After decelerating considerably from its 2014 average of 55.7, U.S.
manufacturing is showing signs of life again with two consecutive monthly
gains.
General improvement in U.S. manufacturing reflects stronger domestic spending, but relatively tepid demand abroad. Improvement in euro area growth prospects, as witnessed in the PMI releases earlier today (and assuming an amicable resolution of the Greek crisis), is being offset by subdued activity in many emerging markets. Meanwhile, the strong dollar is and will continue to be a competitive headwind. Still, with stronger domestic momentum, alongside what should be improving foreign demand over the next several months, U.S. manufacturing should continue to improve over the remainder of the year, says TD Economics.
The underlying details were not quite as positive, and market reaction so far has been lackustre. Still, with admittedly volatile yet positive headlines out of Greece alongside the strong ADP employment report released earlier today, the DXY dollar index is up on the day and Treasury yields are up several basis points heading into the all important payrolls report tomorrow. TD Economics expects another +200k print, which should further firm market expectations for a 2015 rate hike.
General improvement in U.S. manufacturing reflects stronger domestic spending, but relatively tepid demand abroad. Improvement in euro area growth prospects, as witnessed in the PMI releases earlier today (and assuming an amicable resolution of the Greek crisis), is being offset by subdued activity in many emerging markets. Meanwhile, the strong dollar is and will continue to be a competitive headwind. Still, with stronger domestic momentum, alongside what should be improving foreign demand over the next several months, U.S. manufacturing should continue to improve over the remainder of the year, says TD Economics.
The underlying details were not quite as positive, and market reaction so far has been lackustre. Still, with admittedly volatile yet positive headlines out of Greece alongside the strong ADP employment report released earlier today, the DXY dollar index is up on the day and Treasury yields are up several basis points heading into the all important payrolls report tomorrow. TD Economics expects another +200k print, which should further firm market expectations for a 2015 rate hike.
02 July 2015, 07:36
First, the ECB will discuss the level of emergency lending to Greek banks
today and may reassess the haircuts it imposes on Greek bank collateral in
exchange forfunds. No changes are likely.
Second, without a bailout extension or a new programme in the next two weeks, Greece will miss the 20 July deadline for repaying €3.50bnto the ECB.
Last night, Greece submitted a last-minute proposal (a two-year €29.1bn extension with debt restructuring) in return for calling-off a referendum, but unless there is a U-turn by EU officials, no breakthrough is likely before Sunday's referendum, states Societe Generale.
The Eurogroup is holding another teleconference today, but German chancellor Merkel has already ruled out new negotiations until after the referendum.
Third, on Sunday 5 July, Greek voters must choose between accepting or rejecting the latest bailout proposal.
Second, without a bailout extension or a new programme in the next two weeks, Greece will miss the 20 July deadline for repaying €3.50bnto the ECB.
Last night, Greece submitted a last-minute proposal (a two-year €29.1bn extension with debt restructuring) in return for calling-off a referendum, but unless there is a U-turn by EU officials, no breakthrough is likely before Sunday's referendum, states Societe Generale.
The Eurogroup is holding another teleconference today, but German chancellor Merkel has already ruled out new negotiations until after the referendum.
Third, on Sunday 5 July, Greek voters must choose between accepting or rejecting the latest bailout proposal.
02 July 2015, 07:30
Source: Thomson Reuters
- AUD/CNH 5, 10 & 20 dma's edge lower- modest bearish setup
- 4.7055 Jun base & 4.8408 38.2% Fibo defined month's range - pivotal levels
- Earlier 4.7318 low & 4.7583 38.2% of yesterday's fall are initial support/resistance
- Doji so far in Asia - bearish outside day yesterday - closed -0.8% AUD led
-
02 July 2015, 07:28Although the level of sales came down a notch from a monster May, June's tally is nothing to sneer at. Both the University of Michigan's and the Conference Board's consumer confidence indices surged in June, leading buyers into showrooms.
Higher incentive spending at roughly +3.6% Y/Y according to TrueCar, also helped boost sales. With continued improvement in the labor market, slowly leading into stronger wage growth, auto sales should maintain a relatively lofty level ahead.
A go-slow Fed should also ensure that borrowing costs remain cheap. While further gains from this level will likely be harder to come by, auto sales are on pace to come in just shy of 17mn on the year.
New auto sales grew over 12% annualized this quarter, suggesting strong quarterly spending on durables. Overall, growth in consumer spending is likely to accelerate from 2.1% in the first quarter to roughly 3% in the second, says Economic TD.
02 July 2015, 07:16
- While markets await further developments in the Greek crisis, the focus today will at least briefly turn to the US. The monthly employment report has usually been seen as the key release of the month and that the FOMC has made "further improvement" in the labour market as one of the criteria it wishes to see met before it starts to raise interest rates, has underlined its importance. By and large data have suggested that economic growth has picked up in Q2 and this is expected to reflect in a solid June payrolls report today, says Lloyds bank.
- Other labour indicators point to a strong report. Initial jobless claims have remained low during June, while yesterday's ADP estimate of private sectors payrolls was higher than expected at 237k. According to Lloyds Bank, a 235k rise in employment, while the unemployment rate is forecast to dip to 5.4%. Such an outcome would leave a September policy rate rise as still a strong possibility. There will also be considerable interest in whether average earnings growth continues to drift up following an unexpectedly strong rise in May. The annual rate is likely to be unchanged at 2.3%, says Lloyds Bank.
- Elsewhere it is a quiet day for data releases with the UK construction PMI for June the next most notable. The revisions to UK GDP published earlier this week, which were partially driven by changes to construction estimates, showed that while this sector is relatively small it can have an outsize impact on GDP. However, it should be noted that the correlation between the PMI and the 'official' construction output series is not always very high. Lloyds Bank forecasts a PMI rise for June.
02 July 2015, 07:07
- Pair unable to move any higher on lack of buying interests
- THB may not weaken amid lower imports and consumption
- Pair last at 33.78-80; Set -0.33%
02 July 2015, 07:00
BOJ offers to supply 800 bln yen in funds at a fixed rate for 7/6-10/5 at all
offices.
02 July 2015, 06:58
The ISM manufacturing index was 53.5 in June. This matches the high for the
year and indicates that the drag on factories coming from the strong U.S. dollar
and weak oil industry is no longer having as much negative impact as before, the
nadir appears to have been during March-April.
Gaining consumer and housing sectors are also now lending a helping hand.
The ISM employment component was 55.5 (the highest since December), adding to the upside risk to tomorrow's payroll report. The latter risk was also boosted by the stronger-than-expected ADP employment report.
It came in at 237k for private payrolls. Construction spending in May was also stronger than expected, up 0.8%. On balance, today's data adds to the evidence suggesting the U.S. economy is shaking-off its "soft patch" shackles and keeping the Fed on track to hike rates later year, we get another solid employment report on Thursday.
"Payroll growth has been forecasted 220k but given the ISM and ADP readings there is net upside risk to this", says BMO Economics.
Gaining consumer and housing sectors are also now lending a helping hand.
The ISM employment component was 55.5 (the highest since December), adding to the upside risk to tomorrow's payroll report. The latter risk was also boosted by the stronger-than-expected ADP employment report.
It came in at 237k for private payrolls. Construction spending in May was also stronger than expected, up 0.8%. On balance, today's data adds to the evidence suggesting the U.S. economy is shaking-off its "soft patch" shackles and keeping the Fed on track to hike rates later year, we get another solid employment report on Thursday.
"Payroll growth has been forecasted 220k but given the ISM and ADP readings there is net upside risk to this", says BMO Economics.
02 July 2015, 06:45
JAPAN 10-YEAR JGB AUCTION BID-TO-COVER RATIO 2.62
02 July 2015, 06:45
JAPAN 10-YEAR JGB AUCTION LOWEST PRICE 98.8900, AVERAGE PRICE 98.9200, BIDS
ACCEPTED AT LOWEST PRICE 98.9443 PCT
02 July 2015, 06:40
Emerging markets sentiment was generally week almost everywhere.
But, global manufacturing output should show an improvement in upcoming months, given the strength of the leading DM economies, the apparent signs of growth stabilization in China and brighter outlooks elsewhere in Asia (EM and Japan) for the second half of the year, says Barclays.
This is also implied by the solid performance of the services sector, particularly in DM. The June reading of global new orders and inventories support this view, as we see continued improvement in demand (global new orders rose to -0.38 from -0.42 in May) alongside additional (although moderate) destocking.
That being said, the weakness in EM poses a non-negligible downside risk to global growth and the manufacturing sector recovery.
But, global manufacturing output should show an improvement in upcoming months, given the strength of the leading DM economies, the apparent signs of growth stabilization in China and brighter outlooks elsewhere in Asia (EM and Japan) for the second half of the year, says Barclays.
This is also implied by the solid performance of the services sector, particularly in DM. The June reading of global new orders and inventories support this view, as we see continued improvement in demand (global new orders rose to -0.38 from -0.42 in May) alongside additional (although moderate) destocking.
That being said, the weakness in EM poses a non-negligible downside risk to global growth and the manufacturing sector recovery.
02 July 2015, 06:35
JAPAN 03-MONTH TREASURY DISCOUNT BILL AUCTION LOWEST PRICE 100.0000, AVERAGE
PRICE 100.0006, BIDS ACCEPTED AT LOWEST PRICE 18.0320 PCT
02 July 2015, 06:32
While the growth backdrop should improve in H2, the surprise Greece
referendum threw markets into a tailspin. On Monday, macro/CTA funds had their
worst day since August 2007, long-short equity HFs were down 1.2% and 67% of US
mutual funds underperformed their benchmark. Thus, positioning appears to be
offside as volatility has risen and the spike in value at risk could lead to a
more pro-longed de-risking as we start Q3.
Our composite equity beta measure, comprising mutual funds, hedge funds and asset allocation funds, rose to the highest level since early December. When composite beta was at least 1.0 stdev above average, global equities declined 2% over the next month on average.
The difference between the overweight and underweight signal, likely reflects the notion that positioning tends to run higher during periods of equity inflows. Therefore, the return of sizeable equity inflows is critical to an orderly reduction of risk exposure
Our composite equity beta measure, comprising mutual funds, hedge funds and asset allocation funds, rose to the highest level since early December. When composite beta was at least 1.0 stdev above average, global equities declined 2% over the next month on average.
The difference between the overweight and underweight signal, likely reflects the notion that positioning tends to run higher during periods of equity inflows. Therefore, the return of sizeable equity inflows is critical to an orderly reduction of risk exposure
02 July 2015, 06:15
US continues to pile up positive net investment income, despite a net -$7tn
investment position. This positive income in light of a large negative NIIP
position is a striking contrast to other countries, such as Germany or in
Japan.
Indeed, income has continued to grow. One crucial reason has been the US still enjoys significantly higher direct investment returns overseas than do foreigners in the US, which has been a persistent feature in the data, says Bank of America.
Meanwhile, portfolio income has generally shown a more even performance. Still, the US has also benefited from net returns to equity markets given its riskier portfolio of assets, although the degree of riskiness has diminished a bit in more recent data.
There is much concern, however, about whether the peculiar nature of strong income and relatively high indebtedness will continue, but relatively robust returns and US outperformance has persisted over the years.
Indeed, income has continued to grow. One crucial reason has been the US still enjoys significantly higher direct investment returns overseas than do foreigners in the US, which has been a persistent feature in the data, says Bank of America.
Meanwhile, portfolio income has generally shown a more even performance. Still, the US has also benefited from net returns to equity markets given its riskier portfolio of assets, although the degree of riskiness has diminished a bit in more recent data.
There is much concern, however, about whether the peculiar nature of strong income and relatively high indebtedness will continue, but relatively robust returns and US outperformance has persisted over the years.
02 July 2015, 06:11
Recent US net international investment position data remain consistent with
our view for a secular positive trend in USD. USD strengthening since the
crisis, compared to when the EUR-USD was around 1.60 in summer 2008, have
worsened the NIIP, especially over the last year Still, the NIIP has helped to
effectively smooth over years of previous indebtedness.
The diminished impact from previous deficits is one core feature of our expectations for longer-term USD upside. While the rolling crisis in Greece and increasing concerns about Chinese growth and equities jostle FX markets near term, we still hold onto our view of parity for EUR-USD for the end of the year and 2016.
In a cyclical sense, relative monetary policy between a Fed is hiking rates and an ECB still in a quantitative easing program. But in a longer-term ense, fundamental exchange rate models often revolve around measures of foreign indebtedness, such as current account balances. Such models also support USD strength as well, states Bank of America.
The diminished impact from previous deficits is one core feature of our expectations for longer-term USD upside. While the rolling crisis in Greece and increasing concerns about Chinese growth and equities jostle FX markets near term, we still hold onto our view of parity for EUR-USD for the end of the year and 2016.
In a cyclical sense, relative monetary policy between a Fed is hiking rates and an ECB still in a quantitative easing program. But in a longer-term ense, fundamental exchange rate models often revolve around measures of foreign indebtedness, such as current account balances. Such models also support USD strength as well, states Bank of America.
02 July 2015, 06:07
Recent US net international investment position data remain consistent with
our view for a secular positive trend in USD. USD strengthening since the
crisis, compared to when the EUR-USD was around 1.60 in summer 2008, have
worsened the NIIP, especially over the last year Still, the NIIP has helped to
effectively smooth over years of previous indebtedness.
The diminished impact from previous deficits is one core feature of our expectations for longer-term USD upside. While the rolling crisis in Greece and increasing concerns about Chinese growth and equities jostle FX markets near term, we still hold onto our view of parity for EUR-USD for the end of the year and 2016.
In a cyclical sense, relative monetary policy between a Fed is hiking rates and an ECB still in a quantitative easing program. But in a longer-term ense, fundamental exchange rate models often revolve around measures of foreign indebtedness, such as current account balances. Such models also support USD strength as well.
The diminished impact from previous deficits is one core feature of our expectations for longer-term USD upside. While the rolling crisis in Greece and increasing concerns about Chinese growth and equities jostle FX markets near term, we still hold onto our view of parity for EUR-USD for the end of the year and 2016.
In a cyclical sense, relative monetary policy between a Fed is hiking rates and an ECB still in a quantitative easing program. But in a longer-term ense, fundamental exchange rate models often revolve around measures of foreign indebtedness, such as current account balances. Such models also support USD strength as well.
- Pair opens at 13325-335, taken right away but sideways since
- Pair attracts mixed interests between 13330-13340 range so far, awaits leads after US payrolls tonight
- NDFs hold firm, last 13410-440; JKSE +0.49%
02 July 2015, 05:39
CSI300 INFRASTRUCTURE INDEX DOWN NEARLY 3 PCT
02 July 2015, 05:36
- Pair ran out of gas after 3.7760 high so far
- Weak oil/commodities strengthen, USD bullish bias
- Interbank longs from overnight booked profit, cautious ahead of US NFP due on Friday
- May see 3.7650-3.7750 for rest of day, last 3.7695-15, range 3.7670-60 so far
02 July 2015, 05:34
SHANGHAI COMPOSITE INDEX DOWN OVER 3 PCT
02 July 2015, 05:27
CHINA'S CSI300 ENERGY SUBINDEX DOWN OVER 4 PCT .
02 July 2015, 05:20
South Korea's current account surplus widened to USD8.7bn in May (April:
USD8.1bn; March: USD10.4bn), broadly in line with the forecast (USD8.5bn). The
slightly bigger surplus was driven by a substantial improvement in the primary
income account, following dividend payments in April; alongside a smaller
improvement in the services balance, this helped offset a narrowing in the goods
balance surplus, which was driven by a jump in imports.
With the cumulative year-to-date surplus now standing at USD40.2bn, the current account surplus is expected to reach USD94.3bn in 2015 (BoK: USD96bn; 2014: USD89.2bn) and USD84.4bn in 2016 (BoK: USD82bn). However, with activity remaining soft and the marginal benefit of any further rate cuts diminishing, the emphasis is likely to be on other growth levers - such as fiscal stimulus (supplementary budget) and an engineering of a weaker KRW to support growth.
Indeed, on 26 June, the government announced what believed to be the first round of measures to weaken the currency. All told, it is believed that the measures will generate an additional USD20bn in potential outflows through the capital account this year, in a bid to offset the estimated USD96bn current account surplus. This adds to recent calls for Korean sovereign wealth funds to investment more funds abroad.
The current account surplus is likely to remain elevated in the coming months, even as the oil import bill could creep higher on a monthly basis. However, the extended period of soft activity indicators including IP and exports underscores the need for a weaker KRW bias.
Ultimately, the next significant policy move is expected to be fiscal, not monetary. Indeed, on 25 June, the government unveiled a fiscal stimulus package of KRW15trn, including a supplementary budget, which will be submitted to National Assembly by early July. That said, the actual spending is only likely to reach the economy in Q4.
Barclays notes:
With the cumulative year-to-date surplus now standing at USD40.2bn, the current account surplus is expected to reach USD94.3bn in 2015 (BoK: USD96bn; 2014: USD89.2bn) and USD84.4bn in 2016 (BoK: USD82bn). However, with activity remaining soft and the marginal benefit of any further rate cuts diminishing, the emphasis is likely to be on other growth levers - such as fiscal stimulus (supplementary budget) and an engineering of a weaker KRW to support growth.
Indeed, on 26 June, the government announced what believed to be the first round of measures to weaken the currency. All told, it is believed that the measures will generate an additional USD20bn in potential outflows through the capital account this year, in a bid to offset the estimated USD96bn current account surplus. This adds to recent calls for Korean sovereign wealth funds to investment more funds abroad.
The current account surplus is likely to remain elevated in the coming months, even as the oil import bill could creep higher on a monthly basis. However, the extended period of soft activity indicators including IP and exports underscores the need for a weaker KRW bias.
Ultimately, the next significant policy move is expected to be fiscal, not monetary. Indeed, on 25 June, the government unveiled a fiscal stimulus package of KRW15trn, including a supplementary budget, which will be submitted to National Assembly by early July. That said, the actual spending is only likely to reach the economy in Q4.
Barclays notes:
- We estimate that a package of KRW15trn (excluding the loan guarantees that may inflate the size of the package but contain little stimulus) could lift growth by 0.5pp, although the impact will be felt mainly in 2016.
- We think there is still a risk of further easing if the release of Q2 GDP undershoots the BoK's July revised forecast or if there is no sign of a turnaround in activity indicators.
02 July 2015, 04:56
Stronger US data gave a bid tone to USD ahead of tonight's payrolls. ADP came
in above expectations at 237K (cons 218K) while ISM also beat expectations at
53.5 (cons 53.2), despite yesterday's soft Chicago PMI which rattled markets.
The key underlying details were mostly better (new orders and employment
accelerated, production slowed).
US economists highlights the comments show stability in the manufacturing space though also point to weakness outside the US - "automotive industry remains strong and is expected to stay that way through 2015" (Fabricated Metal Products) though "business continues to hold in the US [but is
US economists highlights the comments show stability in the manufacturing space though also point to weakness outside the US - "automotive industry remains strong and is expected to stay that way through 2015" (Fabricated Metal Products) though "business continues to hold in the US [but is
02 July 2015, 04:48
CHINA'S MAIN STOCK INDEXES REVERSE LOSSES, MOVE INTO POSITIVE TERRITORY
02 July 2015, 04:37
CSI300 TRANSPORT INDEX DOWN OVER 3 PCT
02 July 2015, 04:35
SHANGHAI COMPOSITE INDEX DOWN OVER 2 PCT
02 July 2015, 04:32
CHINA'S YUAN OPENS TRADE AT 6.2030 PER DOLLAR VS LAST CLOSE AT 6.2011
02 July 2015, 04:30
JAPAN OFFERS 2.4 TRLN YEN IN 10-YEAR JGBS WITH 0.40 PCT COUPON
02 July 2015, 04:30
AUSTRALIA MAY GOODS/SERVICES IMPORTS* DECREASE TO -4 % VS PREV 4.0 %
02 July 2015, 04:30
AUSTRALIA MAY GOODS/SERVICES EXPORTS* INCREASE TO +1 % VS PREV -6.0 %
02 July 2015, 04:30
AUSTRALIA MAY TRADE BALANCE G&S (A$)* INCREASE TO -2751 MLN AUD (FCAST
-2200 MLN AUD) VS PREV -3888 MLN AUD
02 July 2015, 04:26
CHINA'S CSI300 INDEX TO OPEN UP 0.8 PCT AT 4,287.73 POINTS
02 July 2015, 04:25
SHANGHAI COMPOSITE INDEX TO OPEN UP 0.1 PCT AT 4,058.62 POINTS
02 July 2015, 04:22
Emerging Asia will continue to experience relatively high rates of growth
over the medium term as economic prospects remain starkly divergent across
emerging markets, according to Fitch Ratings' latest Global Economic Outlook
report. Growth should improve steadily through to 2017 for emerging Asia
excluding China on aggregate. This should occur even as China continues to
experience a gradual structural slowdown.
Differing exposures to key global macro trends - including the fall in commodity prices and likely rise in US interest rates, as well as country-specific factors will continue to contribute to substantial differentiation in growth rates in emerging markets over the next few years. Fitch forecasts aggregate growth in emerging Asia excluding China to accelerate to 6.7% in 2016 from 6.4% in 2015, although robust Indian growth masks a weaker performance relative to the recent trends in other large regional economies such as Indonesia and Malaysia. Fitch forecasts China's growth to slow to 6.8% in 2015 and 6.5% in 2016 as rebalancing continues.
The region's performance is projected to be markedly stronger than in other big emerging markets. Russia and Brazil are forecast to record substantial contractions in GDP in 2015 (-3.5% and -1.5%, respectively), followed by a weak recovery in 2016 and 2017.
India will be key in lifting the aggregate regional growth rate, accounting for almost half of the forecast growth for the region excluding China. Notably, Fitch expects that India's GDP growth rate this year will surpass China's for the first time since 1999, forecasting an acceleration to 8.1% in 2016 (FY17) before settling back to 8.0% in 2017 (FY18). The implementation of structural reforms and resulting pick-up in investment remain key themes for India's growth outlook, and recent data confirm the strengthening demand.
That said, the extent and pace at which reforms translate into higher rates of growth continues to be dependent on implementation, and there are signs that acceleration may be slower than previously expected. While maintaining the expectation for an increase in growth, Fitch has lowered its real GDP growth forecasts for India to 7.8% and 8.1% from 8.0% and 8.3% for FY16 and FY17, respectively.
China's policy-driven economic rebalancing, in contrast with India, should result in a steady reduction in growth to 6.0% by 2017, down from a 9.3% average over 2005-2014. Policy efforts to reduce shadow financing, reform local government borrowing and curb over-investment in real estate will continue to weigh on the economy and contribute to the gradual trending down in growth.
The rebalancing is positive for economic stability in the long run. For now, the build-up in fixed-asset investment in the real estate sector remains a key source of macroeconomic risk. However, recent data does point to a diminishing risk of an outright collapse in activity in the sector. Monetary easing so far this year should contribute to a pick-up in growth in the second half of 2015, though activity data in May points
Differing exposures to key global macro trends - including the fall in commodity prices and likely rise in US interest rates, as well as country-specific factors will continue to contribute to substantial differentiation in growth rates in emerging markets over the next few years. Fitch forecasts aggregate growth in emerging Asia excluding China to accelerate to 6.7% in 2016 from 6.4% in 2015, although robust Indian growth masks a weaker performance relative to the recent trends in other large regional economies such as Indonesia and Malaysia. Fitch forecasts China's growth to slow to 6.8% in 2015 and 6.5% in 2016 as rebalancing continues.
The region's performance is projected to be markedly stronger than in other big emerging markets. Russia and Brazil are forecast to record substantial contractions in GDP in 2015 (-3.5% and -1.5%, respectively), followed by a weak recovery in 2016 and 2017.
India will be key in lifting the aggregate regional growth rate, accounting for almost half of the forecast growth for the region excluding China. Notably, Fitch expects that India's GDP growth rate this year will surpass China's for the first time since 1999, forecasting an acceleration to 8.1% in 2016 (FY17) before settling back to 8.0% in 2017 (FY18). The implementation of structural reforms and resulting pick-up in investment remain key themes for India's growth outlook, and recent data confirm the strengthening demand.
That said, the extent and pace at which reforms translate into higher rates of growth continues to be dependent on implementation, and there are signs that acceleration may be slower than previously expected. While maintaining the expectation for an increase in growth, Fitch has lowered its real GDP growth forecasts for India to 7.8% and 8.1% from 8.0% and 8.3% for FY16 and FY17, respectively.
China's policy-driven economic rebalancing, in contrast with India, should result in a steady reduction in growth to 6.0% by 2017, down from a 9.3% average over 2005-2014. Policy efforts to reduce shadow financing, reform local government borrowing and curb over-investment in real estate will continue to weigh on the economy and contribute to the gradual trending down in growth.
The rebalancing is positive for economic stability in the long run. For now, the build-up in fixed-asset investment in the real estate sector remains a key source of macroeconomic risk. However, recent data does point to a diminishing risk of an outright collapse in activity in the sector. Monetary easing so far this year should contribute to a pick-up in growth in the second half of 2015, though activity data in May points
02 July 2015, 04:21
JAPAN OFFERS 5.12 TRLN YEN IN TREASURY DISCOUNT BILLS
02 July 2015, 04:20
HK’S HANG SENG INDEX TO OPEN UP 0.8 PCT AT 26,459.43 POINTS
02 July 2015, 04:18
CSI300 INDEX FUTURES FOR JULY DELIVERY REVERSES EARLY LOSSES, NOW UP 0.4 PCT
02 July 2015, 04:16
CHINA CBANK INJECTS 50 BLN YUAN FOR THE WEEK THROUGH OPEN MARKET OPERATIONS,
VERSUS 35 BLN NET INJECTION LAST WEEK
02 July 2015, 04:16
CSI300 INDEX FUTURES FOR JULY DELIVERY OPEN DOWN NEARLY 1 PCT
02 July 2015, 04:16
CHINA CBANK INJECTS 35 BLN YUAN THROUGH 7 DAY REVERSE REPOS TODAY - TRADERS
02 July 2015, 04:15
CHINA 7-DAY REPO OPENS AT 2.6700 PCT VERSUS 2.6662 PCT WEIGHTED AVERAGE
PREVIOUS CLOSE
02 July 2015, 04:15
Macro/CTA funds had their largest drawdown on Monday since August 2007 as
risk assets collapsed and the euro rallied. With markets in flux after the
Greece-induced shock, the composite equity positioning measure is at the highest
level since early December 2014. On the other hand, bond positioning is a bit
cleaner.
Exposure to euro area equities is still underweight, helping to support the rally today on Greek headlines. However, trust has been eroded and the July 5 referendum is likely to proceed. Although recent developments may favor a 'yes' vote and could lead to a relief rally in global equities, the potential for ongoing political uncertainty in Greece combined with extended positioning could see a more moderate move than some are expecting. A "no" vote could lead to a large selloff . Extended equity positioning is an overhang near term, but fundamentals and fund flows are the key to sustained performance; both should be supportive of equities in Q3.
Equity fund positioning in aggregate is now 1.1std above average. When composite beta was at least 1.0 stdev above average, global equities declined 2% over the next month on average.
Bond positioning is cleaner but bond redemptions are an overhang. 82% of US diversified bond funds underperformed the benchmark on Monday, suggesting cash levels are high after the April-May bond selloff. However, risk exposures at bond funds and relative value HFs ticked higher recently.
Fund flows are at an inflection point. There is a $200bn fund flow underweight in equities and the recent turn up in rates points to better relative equity inflows. Since the rise in rates, bond funds have had outflows of $20bn in the past three weeks compared with equity inflows of $15bn the past two weeks. However, the pickup in volatility could put the nascent trend at risk. Continued equity inflows are critical to facilitate a more orderly de-risking as new money enters the asset class.
Exposure to euro area equities is still underweight, helping to support the rally today on Greek headlines. However, trust has been eroded and the July 5 referendum is likely to proceed. Although recent developments may favor a 'yes' vote and could lead to a relief rally in global equities, the potential for ongoing political uncertainty in Greece combined with extended positioning could see a more moderate move than some are expecting. A "no" vote could lead to a large selloff . Extended equity positioning is an overhang near term, but fundamentals and fund flows are the key to sustained performance; both should be supportive of equities in Q3.
Equity fund positioning in aggregate is now 1.1std above average. When composite beta was at least 1.0 stdev above average, global equities declined 2% over the next month on average.
Bond positioning is cleaner but bond redemptions are an overhang. 82% of US diversified bond funds underperformed the benchmark on Monday, suggesting cash levels are high after the April-May bond selloff. However, risk exposures at bond funds and relative value HFs ticked higher recently.
Fund flows are at an inflection point. There is a $200bn fund flow underweight in equities and the recent turn up in rates points to better relative equity inflows. Since the rise in rates, bond funds have had outflows of $20bn in the past three weeks compared with equity inflows of $15bn the past two weeks. However, the pickup in volatility could put the nascent trend at risk. Continued equity inflows are critical to facilitate a more orderly de-risking as new money enters the asset class.
2 July 2015, 04:11
- "The employment report is likely to show another solid month of job
creation in June.
As a result, the unemployment rate will likely lower to 5.4% from 5.5%."
- "Within the components of the establishment survey, we expect private payrolls of 215,000 with the government only adding 5,000. Similar to last month, we expect the goods side of the economy to reveal weaker job creation, consistent with the softer trajectory of industrial production and capital expenditures. Moreover, we have yet to see the end of job cuts in the energy-related sectors."
- "The household survey, which provides the data on the unemployment rate, should also show solid job growth. The three-month average has been a bit softer than nonfarm payrolls, with growth of only 166,000, but the six-month average has been consistent at 244,000. A wildcard is the change in labor force participation. After a sharp gain of 0.11% in May, we look for little change in June, given the volatile nature of the series."
02 July 2015, 04:05
BRAZIL'S TOMBINI SAYS SEES 2015 AS YEAR OF TRANSITION THAT SETS BASIS FOR
MORE CONSTRUCTIVE LONG-TERM GROWTH OUTLOOK
02 July 2015, 04:04
BRAZIL'S TOMBINI SAYS PHASES OF ADJUSTMENT TEND TO OVERLAP, NOT LINEAR
02 July 2015, 04:03
BRAZIL'S TOMBINI SAYS DOWNTURN IN ECONOMY, LESS TIGHT JOB MARKET HELPING TO
CONTAIN INFLATION
02 July 2015, 04:00
BRAZIL CENTRAL BANK PRESIDENT TOMBINI SAYS HAS SEEN SIGNIFICENT IMPROVEMENT
IN INFLATION EXPECTATIONS FOR FUTURE YEARS
02 July 2015, 04:00
BRAZIL CENTRAL BANK PRESIDENT TOMBINI SAYS ANOTHER CHALLENGE IS TO AVOID THAT
REALIGNMENT OF RELATIVE PRICES GOES BEYOND 2015
02 July 2015, 04:00
NEW ZEALAND COMMODITY PRICE INDEX -3.1 PCT IN JUNE; -19.7 PCT ON YEAR AGO -
ANZ BANK
02 July 2015, 04:00
TAIWAN STOCKS OPEN FLAT AT 9,372.46 POINTS
02 July 2015, 03:59
BRAZIL CENTRAL BANK PRESIDENT TOMBINI SAYS SEES NEED TO BOOST PRODUCTIVITY,
INFRASTRUCTURE AND SUPPLY IN BRAZIL
02 July 2015, 03:59
BRAZIL CENTRAL BANK PRESIDENT TOMBINI SAYS FISCAL CONSOLIDATION IS KEY
CONDITION FOR DECLINE, SUSTAINABILITY OF NATIONAL DEBT
02 July 2015, 03:59
BRAZIL CENTRAL BANK PRESIDENT TOMBINI SAYS EXTERNAL DEFICITS TO REVERSE ABOUT
20 PCT FROM PAST YEAR AND WILL BE BROADLY FINANCED BY FDI
02 July 2015, 03:55
BRAZIL CENTRAL BANK PRESIDENT TOMBINI SAYS CURRENCY SWAP PROGRAM CUSHIONED
ECONOMY AGAINST VOLATILITY
02 July 2015, 03:53
BRAZIL CENTRAL BANK PRESIDENT TOMBINI SAYS GLOBAL SENTIMENT IS THAT MONETARY
NORMALIZATION PROCESS IN THE US TAKING PLACE
02 July 2015, 03:53
BRAZIL CENTRAL BANK PRESIDENT TOMBINI SAYS ANALYZING SIGNS OF RECOVERY IN
U.S. ECONOMY, DEVELOPMENTS IN GREECE, CHINA ECONOMIES
02 July 2015, 03:09
AUSTRALIA'S S&P/ASX 200 INDEX UP 0.14 PCT AT 5,523.30 POINTS IN EARLY
TRADE
02 July 2015, 03:01
SOUTH KOREAN WON OPENS ONSHORE TRADE AT 1,124.0 PER DOLLAR VS 1,117.5 AT
PREVIOUS CLOSE
02 July 2015, 03:01
SEOUL SHARES OPEN UP 0.44 PCT
02 July 2015, 02:55
CHINA'S SECURITIES REGULATOR TO ALLOW STOCK BROKERAGES TO ISSUE BONDS TO
WIDEN FUNDING CHANNELS-XINHUA
02 July 2015, 02:51
BOJ TANKAN: JAPAN FIRMS EXPECT CONSUMER PRICES TO RISE AN ANNUAL 1.6 PCT 5
YEARS FROM NOW VS +1.6 PCT IN PREV SURVEY
02 July 2015, 02:51
BOJ TANKAN: JAPAN FIRMS EXPECT CONSUMER PRICES TO RISE AN ANNUAL 1.5 PCT 3
YEARS FROM NOW VS +1.6 PCT IN PREV SURVEY
02 July 2015, 02:51
BOJ JUNE TANKAN: JAPAN FIRMS EXPECT CONSUMER PRICES TO RISE 1.4 PCT A YEAR
FROM NOW VS +1.4 PCT IN PREV SURVEY
02 July 2015, 02:50
JAPAN W/E FOREIGN INVEST JP STOCK INCREASE TO 298.2 BLN JPY VS PREV -253.9
BLN JPY
02 July 2015, 01:00
NZ's NZX 50 OPENS AT 5794.360 POINTS, UP 0.010 PCT
02 July 2015, 00:26
Banxico announced changes to its monetary policy calendar to coordinate
decisions along with the US Fed. The press release mentions that the relative
monetary position with the US has an important effect in the evolution of the
USDMXN, inflation expectations and price dynamics in Mexico, motivating an
adjustment in the calendar. Also, this relative position weighs in a relevant
manner on the board's decisions.
Barclays notes:
Barclays notes:
- After the announcement, we confirm our view that Banxico will hike rates right after the US Fed.
- We believe that the Banxico's board would like to play it safe and make decisions under a more comfortable meeting calendar in order to adjust rates along with the Fed.
- In that sense, if the Fed implements its first hike in the September meeting, Banxico will likely react to this announcement. As a consequence, we change our call for a September 21 hike as well.
02 July 2015, 00:16
Barclays notes:
Our final reading of the Barclays global manufacturing confidence in June points to a slight decline, to -0.43 from -0.42, lower than our initial estimate , as many EM countries (including India, Korea, Taiwan, Turkey and Mexico) saw softening sentiment relative to last month, while solid expansion in the US and euro area manufacturing sectors provided a significant offset on an aggregate basis.
In the US, the ISM manufacturing was stronger than expected at 53.6, up 0.2 points from May; however, the components breakdown reveals that the encouraging growth in demand (manufacturing new orders) was counterbalanced by a decline in current production. Nevertheless, both components (which we focus on for the global aggregate) remain solidly in expansion territory and bode well for our expectation for a modest manufacturing rebound in the second half of the year.
In the euro area, the improvement in headline manufacturing PMI was confirmed at 52.5 (up from 52.2), importantly coming from across the board (excluding Greece); German manufacturing rebounded from last month's decline, and France's index crossed the 50 benchmark for the first time since April 2014 on healthy improvement in production and new orders components. Spain and Italy moderated slightly from peak levels, but remained well above historic averages.
Within developed economies, the points of weakness in June include Japan and the UK. In Japan, the headline PMI manufacturing fell to 50.1 from 50.9, slightly better than the 'flash' estimate but includes a strong decline in new orders (to 49.6 from 50.9). We believe an improvement in IP in the country will improve later this year, but not materially before Q3 . In the UK, headline manufacturing PMI fell to 51.4 from 51.9, the lowest level in more than two years, on weak demand and sales.
Emerging markets sentiment was generally week almost everywhere. In China, the official NBS PMI was unchanged at 50.2 (below expectations) on slow domestic and external demand, as well as subdued employment conditions and deflationary pressures. The headline Markit PMI manufacturing came in at 49.4, slightly below the 'flash' reading. Other EM Asia declined significantly from May: India's headline PMI manufacturing dropped to 51.3 from 52; Korea and Taiwan fell to 46.1 and 46.3 (from 47.8 and 49.3), driven by strong plunges in new orders of 3.5 and 4.8 points to 43.7 and 43.2, respectively - very weak compared with long-term as well as short-term historic averages.
Altogether, we continue to believe that global manufacturing output should show an improvement in upcoming months, given the strength of the leading DM economies, the apparent signs of growth stabilization in China and brighter outlooks elsewhere in Asia (EM and Japan) for the second half of the year. This is also implied by the solid performance of the services sector, particularly in DM.
The June reading of global new orders and inventories support this view, as we see continued improvement in demand (global new orders rose to -0.38 from -0.42 in May) alongside additional (albeit moderate) destocking. That being said, the weakness in EM poses a non-negligible downside risk to global growth and the manufacturing sector recovery.
Our final reading of the Barclays global manufacturing confidence in June points to a slight decline, to -0.43 from -0.42, lower than our initial estimate , as many EM countries (including India, Korea, Taiwan, Turkey and Mexico) saw softening sentiment relative to last month, while solid expansion in the US and euro area manufacturing sectors provided a significant offset on an aggregate basis.
In the US, the ISM manufacturing was stronger than expected at 53.6, up 0.2 points from May; however, the components breakdown reveals that the encouraging growth in demand (manufacturing new orders) was counterbalanced by a decline in current production. Nevertheless, both components (which we focus on for the global aggregate) remain solidly in expansion territory and bode well for our expectation for a modest manufacturing rebound in the second half of the year.
In the euro area, the improvement in headline manufacturing PMI was confirmed at 52.5 (up from 52.2), importantly coming from across the board (excluding Greece); German manufacturing rebounded from last month's decline, and France's index crossed the 50 benchmark for the first time since April 2014 on healthy improvement in production and new orders components. Spain and Italy moderated slightly from peak levels, but remained well above historic averages.
Within developed economies, the points of weakness in June include Japan and the UK. In Japan, the headline PMI manufacturing fell to 50.1 from 50.9, slightly better than the 'flash' estimate but includes a strong decline in new orders (to 49.6 from 50.9). We believe an improvement in IP in the country will improve later this year, but not materially before Q3 . In the UK, headline manufacturing PMI fell to 51.4 from 51.9, the lowest level in more than two years, on weak demand and sales.
Emerging markets sentiment was generally week almost everywhere. In China, the official NBS PMI was unchanged at 50.2 (below expectations) on slow domestic and external demand, as well as subdued employment conditions and deflationary pressures. The headline Markit PMI manufacturing came in at 49.4, slightly below the 'flash' reading. Other EM Asia declined significantly from May: India's headline PMI manufacturing dropped to 51.3 from 52; Korea and Taiwan fell to 46.1 and 46.3 (from 47.8 and 49.3), driven by strong plunges in new orders of 3.5 and 4.8 points to 43.7 and 43.2, respectively - very weak compared with long-term as well as short-term historic averages.
Altogether, we continue to believe that global manufacturing output should show an improvement in upcoming months, given the strength of the leading DM economies, the apparent signs of growth stabilization in China and brighter outlooks elsewhere in Asia (EM and Japan) for the second half of the year. This is also implied by the solid performance of the services sector, particularly in DM.
The June reading of global new orders and inventories support this view, as we see continued improvement in demand (global new orders rose to -0.38 from -0.42 in May) alongside additional (albeit moderate) destocking. That being said, the weakness in EM poses a non-negligible downside risk to global growth and the manufacturing sector recovery.
01 July 2015, 23:54
Westpac Research notes:
Australian 3yr government bond (futures) yields rose from 2.06% to 2.12%, while the 10yr yield rose from 3.05% to 3.15%.
Australian 3yr government bond (futures) yields rose from 2.06% to 2.12%, while the 10yr yield rose from 3.05% to 3.15%.
01 July 2015, 23:53
Westpac Research notes:
The US 10yr treasury yield rose from 2.35% to 2.44%, steepening the curve. Notable data surprises were ADP payrolls, ISM manufacturing and construction spending, the latter two causing the Atlanta Fed to upgrade its prediction for Q2 GDP from 2.1% to 2.2% (annual).
The US 10yr treasury yield rose from 2.35% to 2.44%, steepening the curve. Notable data surprises were ADP payrolls, ISM manufacturing and construction spending, the latter two causing the Atlanta Fed to upgrade its prediction for Q2 GDP from 2.1% to 2.2% (annual).
01 July 2015, 23:52
Westpac Research notes:
AUD/NZD 1 day: Tentatively forming a minor top at 1.1400. A break below 1.1330 today then targets 1.1275.
AUD/NZD 1-3 month: The RBA will probably remain on hold (albeit with easing risk), while the RBNZ is currently in easing mode. Expected RBA vs RBNZ direction thus favours AUD/NZD over the medium term. The next major target is 1.1580.
AUD/NZD 1 day: Tentatively forming a minor top at 1.1400. A break below 1.1330 today then targets 1.1275.
AUD/NZD 1-3 month: The RBA will probably remain on hold (albeit with easing risk), while the RBNZ is currently in easing mode. Expected RBA vs RBNZ direction thus favours AUD/NZD over the medium term. The next major target is 1.1580.
01 July 2015, 23:49
Westpac Research notes:
AU swap yields 1 day: The 2yr should open around 2.20% while the 10yr should open around 3.44%.
AU swap yields 1-3 month: The 2yr is eking a sideways range of 2.05%-2.30%, while the 10yr should continue to rise with US yields and targets above 3.50%.
AU swap yields 1 day: The 2yr should open around 2.20% while the 10yr should open around 3.44%.
AU swap yields 1-3 month: The 2yr is eking a sideways range of 2.05%-2.30%, while the 10yr should continue to rise with US yields and targets above 3.50%.
01 July 2015, 23:48
Westpac Research notes:
NZ swap yields 1 day: Given the US bond yield movement overnight, the NZ 2yr swap rates should open 1bp higher at 3.11%, while the 10yr should open 2bp higher at 3.97%.
NZ swap yields 1-3 month: Short maturity NZ interest rates should fall further during the next few months. The RBNZ has started a fresh easing phase, which should be worth 75bp in total, and possibly 100bp. We target a low in the 2yr of 2.90% (an OCR of 2.75% plus 15bp risk premium). The 10yr yield will continue to be hostage to expectations of Fed policy, but assuming normalisation starts in September, we target at least 4.30%.
NZ swap yields 1 day: Given the US bond yield movement overnight, the NZ 2yr swap rates should open 1bp higher at 3.11%, while the 10yr should open 2bp higher at 3.97%.
NZ swap yields 1-3 month: Short maturity NZ interest rates should fall further during the next few months. The RBNZ has started a fresh easing phase, which should be worth 75bp in total, and possibly 100bp. We target a low in the 2yr of 2.90% (an OCR of 2.75% plus 15bp risk premium). The 10yr yield will continue to be hostage to expectations of Fed policy, but assuming normalisation starts in September, we target at least 4.30%.
01 July 2015, 23:47
MOODY'S ON GREECE - ANNOUNCEMENT OF A REFERENDUM ADDS A FURTHER, MORE ACUTE,
RISK WHICH POSES ADDITIONAL RISKS TO PRIVATE CREDITORS
01 July 2015, 23:47
MOODY'S -IN ORDER TO BRING DEBT LOAD DOWN TO MORE MANAGEABLE LEVELS, GREEK
GOVERNMENT WOULD NEED TO RUN LARGE PRIMARY SURPLUSES FOR A NUMBER OF YEARS
01 July 2015, 23:46
MOODY'S - WHILE GREECE'S DEBT IS CURRENTLY AFFORDABLE DUE TO SOFT FINANCING
TERMS, IT IS UNSUSTAINABLE OVER THE LONG TERM
01 July 2015, 23:46
MOODY'S - GREECE'S LOCAL- AND FOREIGN-CURRENCY BANK DEPOSIT CEILINGS REMAIN
AT CAA3
01 July 2015, 23:45
MOODY'S - HAS LOWERED THE GREECE'S LOCAL- AND FOREIGN-CURRENCY BOND CEILINGS
TO CAA2 FROM B3
01 July 2015, 23:45
MOODY'S - BELIEVES THAT WITHOUT ONGOING SUPPORT FROM OFFICIAL CREDITORS,
GREECE WILL DEFAULT ON ITS PRIVATELY-HELD DEBT
01 July 2015, 23:43
MOODY'S DOWNGRADES GREECE'S GOVERNMENT BOND RATING TO CAA3; ON REVIEW FOR
FURTHER DOWNGRADE
01 July 2015, 23:42
MOODY'S DOWNGRADES GREECE'S GOVERNMENT BOND RATING TO CAA3; ON REVIEW FOR
FURTHER DOWNGRADE
01 July 2015, 23:42
LAGARDE, WHEN ASKED IF SHE TRUSTS GREEK PARTNERS, RESPONDS THAT IMF HAS 'NO
CHOICE' WHO REPRESENTS A COUNTRY
01 July 2015, 23:42
LAGARDE SAYS GREECE STILL MEMBER OF IMF, FUND WILL CONTINUE TO ENGAGE
01 July 2015, 23:42
LAGARDE SAYS IMF BALANCE SHEET STRONG, SOLID DESPITE MISSED GREEK PAYMENT
01 July 2015, 23:40
LAGARDE SAYS HOPES GREEK REFERENDUM PROVIDES MORE CLARITY, CERTAINTY ABOUT
SITUATION
01 July 2015, 23:40
IMF'S LAGARDE SAYS UNCLEAR WHERE GREEK NEGOTIATIONS STAND
01 July 2015, 23:40
INTERVIEW - IMF'S LAGARDE SAYS APPEARS PREFERABLE GREECE MOVE TOWARD REFORMS
BEFORE EUROPEANS PROVIDE DEBT RELIEF
Resistance Levels
R1: 1.5641
R2: 1.5678 (61.8% retracement level)
R3: 1.5724
Support Levels
S1: 1.5588
S2: 1.55558 (23.6% retracement level)
S3: 1.5513
01 July 2015, 23:06
- GBP/USD broke resistance Level at 1.5604 and is moving below to reach the next support level at 1.5588.
- The currency is trading at 1.5615, immediate support can be seen at 1.5588, a break below this level will expose the pair to next support level at 1.55558 (23.6% Retracement level).
- Major resistance can be found at 1.5678 (61.8% retracement level),a break above this level will will open the door to 1.5700 handle.
Resistance Levels
R1: 1.5641
R2: 1.5678 (61.8% retracement level)
R3: 1.5724
Support Levels
S1: 1.5588
S2: 1.55558 (23.6% retracement level)
S3: 1.5513
01 July 2015, 23:02
NEW ZEALAND DOLLAR TRADES AT $0.6744 IN EARLY ASIA-PACIFIC TRADE
01 July 2015, 23:01
AUSTRALIAN DOLLAR TRADES AT $0.7651 IN EARLY ASIA-PACIFIC TRADE
01 July 2015, 23:00
NASDAQ UNOFFICIALLY CLOSES UP 26.43 POINTS, OR 0.53 PERCENT, AT 5,013.30.
01 July 2015, 23:00
S&P 500 UNOFFICIALLY CLOSES UP 14.67 POINTS, OR 0.71 PERCENT, AT 2,077.78
01 July 2015, 23:00
DOW JONES UNOFFICIALLY CLOSES UP 141.90 POINTS, OR 0.81 PERCENT, AT 17,761.41
01 July 2015, 22:28
UNITED STATES JUN ALL TRUCK SALES* DECREASE TO 9.37 MLN VS PREV 9.68 MLN
01 July 2015, 22:28
UNITED STATES JUN ALL CAR SALES* DECREASE TO 7.78 MLN VS PREV 8.11 MLN
01 July 2015, 22:27
UNITED STATES JUN DOMESTIC TRUCK SALES* DECREASE TO 8.01 MLN (FCAST 8.10 MLN)
VS PREV 8.36 MLN
01 July 2015, 22:27
UNITED STATES JUN DOMESTIC CAR SALES* DECREASE TO 5.61 MLN (FCAST 5.70 MLN)
VS PREV 5.87 MLN
Resistance Levels
R1: 123.18 (50% Retracement Level)
R2: 123.47 (38.2% Retracement Level)
R3: 123.83(23.6% Retracement Level)
Support Levels
S1:122.90 (61.8% Retracement Level)
S2:122.53
S3:122.19
01 July 2015, 22:22
- USD/JPY approaching resistance level at 123.24 (50% Retracement level) and is set to advance further to test next support level at 123.47 (38.2.% Retracement Level).
- The currency is trading at 123.17, immediate support can be seen at 122.90 (61.8% Retracement Level). A break below this level will expose the pair to next support level at 122.53.
- Major resistance can be found at 123.47 (38.2.% Retracement Level) a break above this level will will open the door to 124.00 handle.
Resistance Levels
R1: 123.18 (50% Retracement Level)
R2: 123.47 (38.2% Retracement Level)
R3: 123.83(23.6% Retracement Level)
Support Levels
S1:122.90 (61.8% Retracement Level)
S2:122.53
S3:122.19
01 July 2015, 22:15
UNITED STATES JUN TOTAL VEHICLE SALES* DECREASE TO 17.16 MLN (FCAST 17.20
MLN) VS PREV 17.80 MLN
01 July 2015, 22:13
EUROGROUP'S DIJSSELBLOEM WRITES TO TSIPRAS SAYING WILL ONLY LOOK AT REQUEST
FOR NEW LOAN ON BASIS OF REFERENDUM RESULT
1 July 2015, 22:11
D1 price is on primary bullish condition with the secondary correction
started with 195.86 resistance level.
- "The British Pound is making cautious downward progress against the Japanese Yen after breaking two-month rising trend support. A daily close below the 23.6% Fibonacci retracement at 190.91 exposes the 38.2% level at 187.85."
- "Alternatively, a reversal above the 14.6% Fib at 192.80 clears the way for a test of the 194.33-93 area (range floor support-turned-resistance, trend line)."
- The price is trying to break 191.94 support level for the correction to be continuing, otherwise it will be ranging between 191.94 and 195.86 levels.
- "We entered short GBPJPY at 192.83, initially aiming for 190.91. A stop-loss will be triggered on a daily close above 194.33. We will book half of the position and adjust the stop-loss to breakeven (192.83) prices reach the first target."
01 July 2015, 23:51
Westpac Research notes:
NZD/USD 1 day: The multi-month downtrend remains intact, sub-0.6730 targeted today.
NZD/USD 1-3 month: Our next major target is 0.6560 which was a major low in May 2010. The two main factors expected to contribute to NZD/USD weakness during the next few months are RBNZ easing (the OCR falling to 2.75% or lower) and Fed tightening (FF mid-point to rise by 25bp in September).
NZD/USD 1 day: The multi-month downtrend remains intact, sub-0.6730 targeted today.
NZD/USD 1-3 month: Our next major target is 0.6560 which was a major low in May 2010. The two main factors expected to contribute to NZD/USD weakness during the next few months are RBNZ easing (the OCR falling to 2.75% or lower) and Fed tightening (FF mid-point to rise by 25bp in September).
01 July 2015, 23:50
Westpac Research notes:
AUD/USD 1 day: Retains slightly negative momentum and targets the 0.7600 area.
AUD/USD 1-3 month: Eventual resumption of the strong US dollar trend should weigh on the AUD during the next few months. The next major downside target is 0.7500.
AUD/USD 1 day: Retains slightly negative momentum and targets the 0.7600 area.
AUD/USD 1-3 month: Eventual resumption of the strong US dollar trend should weigh on the AUD during the next few months. The next major downside target is 0.7500.
01 July 2015, 23:49
Westpac Research notes:
AU swap yields 1 day: The 2yr should open around 2.20% while the 10yr should open around 3.44%.
AU swap yields 1-3 month: The 2yr is eking a sideways range of 2.05%-2.30%, while the 10yr should continue to rise with US yields and targets above 3.50%.
AU swap yields 1 day: The 2yr should open around 2.20% while the 10yr should open around 3.44%.
AU swap yields 1-3 month: The 2yr is eking a sideways range of 2.05%-2.30%, while the 10yr should continue to rise with US yields and targets above 3.50%.
01 July 2015, 23:48
Westpac Research notes:
NZ swap yields 1 day: Given the US bond yield movement overnight, the NZ 2yr swap rates should open 1bp higher at 3.11%, while the 10yr should open 2bp higher at 3.97%.
NZ swap yields 1-3 month: Short maturity NZ interest rates should fall further during the next few months. The RBNZ has started a fresh easing phase, which should be worth 75bp in total, and possibly 100bp. We target a low in the 2yr of 2.90% (an OCR of 2.75% plus 15bp risk premium). The 10yr yield will continue to be hostage to expectations of Fed policy, but assuming normalisation starts in September, we target at least 4.30%.
NZ swap yields 1 day: Given the US bond yield movement overnight, the NZ 2yr swap rates should open 1bp higher at 3.11%, while the 10yr should open 2bp higher at 3.97%.
NZ swap yields 1-3 month: Short maturity NZ interest rates should fall further during the next few months. The RBNZ has started a fresh easing phase, which should be worth 75bp in total, and possibly 100bp. We target a low in the 2yr of 2.90% (an OCR of 2.75% plus 15bp risk premium). The 10yr yield will continue to be hostage to expectations of Fed policy, but assuming normalisation starts in September, we target at least 4.30%.
01 July 2015, 23:47
MOODY'S ON GREECE - ANNOUNCEMENT OF A REFERENDUM ADDS A FURTHER, MORE ACUTE,
RISK WHICH POSES ADDITIONAL RISKS TO PRIVATE CREDITORS
01 July 2015, 23:47
MOODY'S -IN ORDER TO BRING DEBT LOAD DOWN TO MORE MANAGEABLE LEVELS, GREEK
GOVERNMENT WOULD NEED TO RUN LARGE PRIMARY SURPLUSES FOR A NUMBER OF YEARS
01 July 2015, 23:46
MOODY'S - WHILE GREECE'S DEBT IS CURRENTLY AFFORDABLE DUE TO SOFT FINANCING
TERMS, IT IS UNSUSTAINABLE OVER THE LONG TERM
01 July 2015, 23:46
MOODY'S - GREECE'S LOCAL- AND FOREIGN-CURRENCY BANK DEPOSIT CEILINGS REMAIN
AT CAA3
01 July 2015, 23:45
MOODY'S - HAS LOWERED THE GREECE'S LOCAL- AND FOREIGN-CURRENCY BOND CEILINGS
TO CAA2 FROM B3
01 July 2015, 23:45
MOODY'S - BELIEVES THAT WITHOUT ONGOING SUPPORT FROM OFFICIAL CREDITORS,
GREECE WILL DEFAULT ON ITS PRIVATELY-HELD DEBT
01 July 2015, 23:43
MOODY'S DOWNGRADES GREECE'S GOVERNMENT BOND RATING TO CAA3; ON REVIEW FOR
FURTHER DOWNGRADE
01 July 2015, 23:42
LAGARDE, WHEN ASKED IF SHE TRUSTS GREEK PARTNERS, RESPONDS THAT IMF HAS 'NO
CHOICE' WHO REPRESENTS A COUNTRY
01 July 2015, 23:42
LAGARDE SAYS GREECE STILL MEMBER OF IMF, FUND WILL CONTINUE TO ENGAGE
01 July 2015, 23:42
LAGARDE SAYS IMF BALANCE SHEET STRONG, SOLID DESPITE MISSED GREEK PAYMENT
01 July 2015, 23:40
LAGARDE SAYS HOPES GREEK REFERENDUM PROVIDES MORE CLARITY, CERTAINTY ABOUT
SITUATION
01 July 2015, 23:40
INTERVIEW - IMF'S LAGARDE SAYS APPEARS PREFERABLE GREECE MOVE TOWARD REFORMS
BEFORE EUROPEANS PROVIDE DEBT RELIEF
01 July 2015, 23:11
BRAZILS BOVESPA CLOSED AT 52,760.15 -320.73 (-0.60%)
Resistance Levels
R1: 1.5641
R2: 1.5678 (61.8% retracement level)
R3: 1.5724
Support Levels
S1: 1.5588
S2: 1.55558 (23.6% retracement level)
S3: 1.5513
01 July 2015, 23:06
- GBP/USD broke resistance Level at 1.5604 and is moving below to reach the next support level at 1.5588.
- The currency is trading at 1.5615, immediate support can be seen at 1.5588, a break below this level will expose the pair to next support level at 1.55558 (23.6% Retracement level).
- Major resistance can be found at 1.5678 (61.8% retracement level),a break above this level will will open the door to 1.5700 handle.
Resistance Levels
R1: 1.5641
R2: 1.5678 (61.8% retracement level)
R3: 1.5724
Support Levels
S1: 1.5588
S2: 1.55558 (23.6% retracement level)
S3: 1.5513
01 July 2015, 23:00
NASDAQ UNOFFICIALLY CLOSES UP 26.43 POINTS, OR 0.53 PERCENT, AT 5,013.30.
01 July 2015, 22:28
UNITED STATES JUN ALL CAR SALES* DECREASE TO 7.78 MLN VS PREV 8.11 MLN
01 July 2015, 22:27
UNITED STATES JUN DOMESTIC TRUCK SALES* DECREASE TO 8.01 MLN (FCAST 8.10 MLN)
VS PREV 8.36 MLN
Resistance Levels
R1: 123.18 (50% Retracement Level)
R2: 123.47 (38.2% Retracement Level)
R3: 123.83(23.6% Retracement Level)
Support Levels
S1:122.90 (61.8% Retracement Level)
S2:122.53
S3:122.19
01 July 2015, 22:22
- USD/JPY approaching resistance level at 123.24 (50% Retracement level) and is set to advance further to test next support level at 123.47 (38.2.% Retracement Level).
- The currency is trading at 123.17, immediate support can be seen at 122.90 (61.8% Retracement Level). A break below this level will expose the pair to next support level at 122.53.
- Major resistance can be found at 123.47 (38.2.% Retracement Level) a break above this level will will open the door to 124.00 handle.
Resistance Levels
R1: 123.18 (50% Retracement Level)
R2: 123.47 (38.2% Retracement Level)
R3: 123.83(23.6% Retracement Level)
Support Levels
S1:122.90 (61.8% Retracement Level)
S2:122.53
S3:122.19
01 July 2015, 22:15
UNITED STATES JUN TOTAL VEHICLE SALES* DECREASE TO 17.16 MLN (FCAST 17.20
MLN) VS PREV 17.80 MLN
01 July 2015, 22:13
EUROGROUP'S DIJSSELBLOEM WRITES TO TSIPRAS SAYING WILL ONLY LOOK AT REQUEST
FOR NEW LOAN ON BASIS OF REFERENDUM RESULT
1 July 2015, 22:11
D1 price is on primary bullish condition with the secondary correction
started with 195.86 resistance level.
- "The British Pound is making cautious downward progress against the Japanese Yen after breaking two-month rising trend support. A daily close below the 23.6% Fibonacci retracement at 190.91 exposes the 38.2% level at 187.85."
- "Alternatively, a reversal above the 14.6% Fib at 192.80 clears the way for a test of the 194.33-93 area (range floor support-turned-resistance, trend line)."
- The price is trying to break 191.94 support level for the correction to be continuing, otherwise it will be ranging between 191.94 and 195.86 levels.
- "We entered short GBPJPY at 192.83, initially aiming for 190.91. A stop-loss will be triggered on a daily close above 194.33. We will book half of the position and adjust the stop-loss to breakeven (192.83) prices reach the first target."
01 July 2015, 22:07
GREEK FINMIN VAROUFAKIS SAYS ONCE GREECE HAS A DEAL, ECB WILL RAISE ELA AGAIN
AND LIQUIDITY WILL BE RESTORED
01 July 2015, 22:04
GREEK FINMIN VAROUFAKIS SAYS GREEK BANK SITUATION WILL RETURN TO NORMAL SOON
AFTER DEAL IS REACHED
01 July 2015, 22:04
GREEK FINMIN VAROUFAKIS SAYS GOVERNMENT IS WILLING TO ACCEPT STRICT MEASURES,
IF DEBT IS SUSTAINABLE
01 July 2015, 21:59
GREEK FINMIN VAROUFAKIS SAYS GREEK GOVERNMENT'S OBJECTIVE IS TO HAVE A DEAL
WITH CREDITORS ON MONDAY
01 July 2015, 21:57
GREEK FINMIN VAROUFAKIS SAYS UPCOMING REFERENDUM HAS TRIGGERED A DEBATE IN
EUROPE ABOUT THE NEED FOR A SUSTAINABLE SOLUTION
01 July 2015, 21:52
GREEK FINMIN VAROUFAKIS SAYS ON MONDAY AFTER REFERENDUM CREDITORS WILL HAVE
UNDERSTOOD THE MESSAGE OF THE GREEK PEOPLE
01 July 2015, 21:50
ARGENTINA TAX REVENUE 140 BLN ACTUAL VS 138.54 BLN PREVIOUS
01 July 2015, 21:44
BRENT CRUDE FUTURES SETTLE AT $62.01/BBL, DOWN $1.58, 2.48 PCT
01 July 2015, 21:37
ECB SPOKESMAN SAYS CONFIRMS EMERGENCY LIQUIDITY ASSISTANCE CEILING FOR GREEK
BANKS MAINTAINED AT CURRENT LEVEL
01 July 2015, 21:37
ECB KEEPS EMERGENCY LIQUIDITY CAP FOR GREEK BANKS UNCHANGED - BANKING SOURCE
01 July 2015, 21:37
ECB SPOKESMAN SAYS CONFIRMS EMERGENCY LIQUIDITY ASSISTANCE CEILING FOR GREEK
BANKS MAINTAINED AT CURRENT LEVEL
01 July 2015, 21:36
MOODY'S - CZECH REPUBLIC BENEFITS FROM THE GOVERNMENT'S TRACK RECORD OF
PRUDENT FISCAL POLICY AND BALANCE SHEET STRENGTH
01 July 2015, 21:26
US TAX-FREE MONEY MARKET FUND ASSETS DECREASE BY $2.16 BLN TO $241.71
BLN-IMONEYNET
01 July 2015, 21:26
US TAXABLE MONEY MARKET FUND ASSETS INCREASE BY $5.23 BLN TO $2.395
TRLN-IMONEYNET
01 July 2015, 21:25
US MONEY MARKET FUND ASSETS INCREASE BY $3.06 BLN TO $2.637 TRLN IN LATEST
WEEK-IMONEYNET
01 July 2015, 21:17
The USD/JPY is still in the process of completing its minor correction after
reaching key long-term target of 124.00. This correction however may end soon,
as Ichimoku cloud provides support at 122.00 area, where the 50% Fibonacci
retracement lies. Also 20/5/5/3 stochastics is near its oversold region,
confirming a correction is about to end. Therefore, It is believed these levels
provide a good opportunity to re-enter a long USD/JPY position from 122.90 for
128.00, 130.00 and ultimately a major resistance level and the final target from
the bullish flag at 135.00. Stop will be a sustained close below 120.00,
estimates RBS
01 July 2015, 21:10
Equities are all red snapping back from Greek hangover. Performance this week
at a glance in chart & table -
S&P 500 -
S&P 500 -
- S&P is us today as tensions over Greece is subsiding across global
market.
- ADP employment showed job gains of 237,000 in June.
- Markit manufacturing PMI rose to 53.6 in June.
- ISM manufacturing PMI rose to 53.5 in June.
- S&P 500 is currently trading at 2074. Immediate support lies at 1980, 2040 and resistance 2164.
- FTSE is up sharply today as risk on environment return globally. Today's range 6637-6520.
- FTSE is currently trading at 6610. Immediate support lies at, 6050 and resistance at 7000. 6750 area is likely to provide resistance.
- DAX is sharply up as Greek drama seems to be towards end. Today's range 11280-10980
- DAX is currently trading at 11180. Immediate support lies at 10730, 10500 and resistance at 11500, 12100 around.
- Stocks across Europe are all trading in green, as investors are less concern over referendum.
- Germany is up (+2.1%), France's CAC40 is up (+1.94%), Italy's FTSE MIB is up (+2.45%).
- EuroStxx50 is currently trading at 3480, up by +1.3% today. Support lies at 3300 and resistance at 3760.
- Nikkei moved up sharply as risk aversion faded and Yen weakened.
- Nikkei is currently trading at 20505. Key support is at 19500 and resistance at 20600 area.
| S&P500 | -1.43% |
| FTSE | -2.03% |
| DAX | -2.94% |
| EuroStxx50 | -3.92% |
| Nikkei | -1.64% |
01 July 2015, 21:07
MEXICO CENTRAL BANK SAYS CALENDAR CHANGES WILL GIVE BANK BOARD MORE UPDATED
INFORMATION ABOUT U.S. FEDERAL RESERVE DECISIONS
01 July 2015, 21:04
CREDIT OFFICERS AT MAJOR BANKS IN THE U.S. FEEL LIQUIDITY IN MARKETS FOR
TREASURY BONDS AND OTHER FIXED-INCOME SECURITIES HAS DETERIORATED - FED SURVEY
01 July 2015, 21:00
BRAZIL JUN TRADE BALANCE* INCREASE TO 4.527 BLN $ (FCAST 4.00 BLN $) VS PREV
2.76 BLN $
01 July 2015, 20:58
EUROGROUP'S DIJSSELBLOEM SAYS NO FURTHER TALKS WITH GREECE UNTIL AFTER
REFERENDUM
01 July 2015, 20:57
U.S. ECONOMY ON TRACK TO GROW 2.2 PCT IN Q2 ON MAY CONSTRUCTION SPENDING DATA
VS +2.1 PCT ON JUNE 25-ATLANTA FED'S GDPNOW MODEL
01 July 2015, 20:43
Metals are continuing their lacklustre performance. Performance this week at
a glance in chart & table -
Gold -
Gold -
- Gold finding no bids over uncertainty in Greece. Performance likely to remain subdued. Today's range $1175-1167.
- Gold is currently trading at $1169/troy ounce. Immediate support lies at $1152 and resistance at $1224, $1236-1240 area.
- Silver finding bids at key support area, tomorrow's non-farm stands very crucial given silver's close ness to support. Today's range $15.8-$15.48
- Silver is currently trading at $15.6/troy ounce. Support lies at $15.42 & resistance at $17.5-17.7, 18.4-18.7.
- Copper continues to trade around 2.62 area. Today's range $2.65 - 2.60
- Copper is currently trading at $2.62/pound, immediate support lies at $2.5 & resistance at $2.75, $2.84, $2.89, $2.95.
| Gold | -0.51% |
| Silver | -1.27% |
| Copper | -0.64% |
01 July 2015, 20:42
ITALY H1 BUDGET DEFICIT 21.6 BLN EUROS, NARROWED BY 20 BLN EUROS FROM DEFICIT
IN H1 2014
01 July 2015, 20:40
ITALY JUNE STATE SECTOR BUDGET SURPLUS 12.3 BLN EUROS VS 7.5 BLN EUROS
SURPLUS IN JUNE 2014 - TREASURY
01 July 2015, 20:36
UKRAINIAN FINANCE MINISTRY SAYS WASHINGTON TALKS PROVIDED A "PRODUCTIVE
EXCHANGE OF VIEWS"
1 July 2015, 20:25
“The prospect that the U.S. Federal Reserve will start exiting zero policy
rates later this year has fueled growing fear of renewed volatility in emerging
economies’ currency, bond, and stock markets,” Nouriel Roubini wrote in his
monthly column for Project Syndicate.
He is confident, however, that the risk of an explicit crisis and distress will be limited, though the prospect of the Fed raising interest rates will likely create turbulence in emerging markets.
Currently, emerging economies have stronger macro and structural fundamentals than they did back in 2013, “which will give them greater resilience when the Fed starts hiking rates.”
As Roubini explained, the main fear for these economies lies in their ability to repay debts.
Lifting interest rates in the U.S. will likely raise the value of the dollar, which could affect emerging market economies that have borrowed trillions of dollars in the recent years.
In his opinion, they will now have to deal with an increase in the real local-currency value of these debts, while rising U.S. rates will push emerging markets' domestic interest rates higher, therefore aggravating debt-service costs.
These things are self-inflicted and the U.S. central bank should not be to blame for emerging market economies' woes.
“In fact, serious financial problems in several emerging economies – particularly oil and commodity producers exposed to the slowdown in China – are unrelated to what the Fed does,” he said.
The exit from zero policy rates will drive issues for countries with huge internal and external borrowing needs, large stocks of dollar-denominated debt, however, the slowdown in China also plays a part, he said.
“China’s economic slowdown, together with the end of the commodity super-cycle, will create additional headwinds for emerging economies, most of which have not implemented the structural reforms needed to boost their potential growth,” he added.
Implementation of necessary reforms would keep the countries in a better position to face any shocks from a U.S. rate liftoff, which is expected later this year.
Some will suffer more than others when hike will happen. But, "with a few exceptions lacking systemic importance, widespread distress and crises need not occur.”
He is confident, however, that the risk of an explicit crisis and distress will be limited, though the prospect of the Fed raising interest rates will likely create turbulence in emerging markets.
Currently, emerging economies have stronger macro and structural fundamentals than they did back in 2013, “which will give them greater resilience when the Fed starts hiking rates.”
As Roubini explained, the main fear for these economies lies in their ability to repay debts.
Lifting interest rates in the U.S. will likely raise the value of the dollar, which could affect emerging market economies that have borrowed trillions of dollars in the recent years.
In his opinion, they will now have to deal with an increase in the real local-currency value of these debts, while rising U.S. rates will push emerging markets' domestic interest rates higher, therefore aggravating debt-service costs.
These things are self-inflicted and the U.S. central bank should not be to blame for emerging market economies' woes.
“In fact, serious financial problems in several emerging economies – particularly oil and commodity producers exposed to the slowdown in China – are unrelated to what the Fed does,” he said.
The exit from zero policy rates will drive issues for countries with huge internal and external borrowing needs, large stocks of dollar-denominated debt, however, the slowdown in China also plays a part, he said.
“China’s economic slowdown, together with the end of the commodity super-cycle, will create additional headwinds for emerging economies, most of which have not implemented the structural reforms needed to boost their potential growth,” he added.
Implementation of necessary reforms would keep the countries in a better position to face any shocks from a U.S. rate liftoff, which is expected later this year.
Some will suffer more than others when hike will happen. But, "with a few exceptions lacking systemic importance, widespread distress and crises need not occur.”
01 July 2015, 20:23
U.S. FED AWARDS $93.41 BLN OVERNIGHT REVERSE REPOS VS $192.60 BLN TUESDAY -
N.Y. FED
01 July 2015, 20:20
Greece referendum seems very likely that will go ahead on Sunday, 5 July.
With the chances for an agreement having faded, It is believed that, other euro
area governments may indeed favor a referendum to finally bring greater clarity
about the Greek government's mandate.
German Chancellor Merkel publicly stated Tuesday that there would be no further negotiations until after the referendum. Furthermore, the European institutions are explicitly supporting a 'YES' vote and have made it clear that a 'NO' vote equals an EMU exit.
It seems the referendum has now been embraced by euro area creditor governments, after the Greek PM had initially forced it on them in a surprise move. With no fundamental change in the institutions' offer, Tsipras will have little choice than to maintain his support for a 'NO' vote, as he announced last Friday. This has become even more important, since he publicly declared that he would resign in case of a 'YES' vote. The referendum is thus now about euro membership and Tsipras's future.
German Chancellor Merkel publicly stated Tuesday that there would be no further negotiations until after the referendum. Furthermore, the European institutions are explicitly supporting a 'YES' vote and have made it clear that a 'NO' vote equals an EMU exit.
It seems the referendum has now been embraced by euro area creditor governments, after the Greek PM had initially forced it on them in a surprise move. With no fundamental change in the institutions' offer, Tsipras will have little choice than to maintain his support for a 'NO' vote, as he announced last Friday. This has become even more important, since he publicly declared that he would resign in case of a 'YES' vote. The referendum is thus now about euro membership and Tsipras's future.
01 July 2015, 20:16
U.S. TREASURIES PRICE DECLINE ACCELERATES AFTER GREEK FINANCE MINISTER SAYS
EUROGROUP BELIEVES GREEK PROPOSAL HEADED "IN THE RIGHT DIRECTION"
01 July 2015, 20:09
Greece referendum seems very likely that will go ahead on Sunday, 5 July.
With Greece PM Tsipras calling the referendum and the chances for an agreement
having faded, It is believed that, other euro area governments may indeed favor
a referendum to finally bring greater clarity about the Greek government's
mandate.
German Chancellor Merkel publicly stated Tuesday that there would be no further negotiations until after the referendum. Furthermore, the European institutions are explicitly supporting a 'YES' vote and have made it clear that a 'NO' vote equals an EMU exit.
It seems the referendum has now been embraced by euro area creditor governments, after the Greek PM had initially forced it on them in a surprise move. With no fundamental change in the institutions' offer, Tsipras will have little choice than to maintain his support for a 'NO' vote, as he announced last Friday. This has become even more important, since he publicly declared that he would resign in case of a 'YES' vote. The referendum is thus now about euro membership and Tsipras's future.
German Chancellor Merkel publicly stated Tuesday that there would be no further negotiations until after the referendum. Furthermore, the European institutions are explicitly supporting a 'YES' vote and have made it clear that a 'NO' vote equals an EMU exit.
It seems the referendum has now been embraced by euro area creditor governments, after the Greek PM had initially forced it on them in a surprise move. With no fundamental change in the institutions' offer, Tsipras will have little choice than to maintain his support for a 'NO' vote, as he announced last Friday. This has become even more important, since he publicly declared that he would resign in case of a 'YES' vote. The referendum is thus now about euro membership and Tsipras's future.
01 July 2015, 20:07
GREEK FINMIN VAROUFAKIS SAYS EUROGROUP BELIEVES GREEK PROPOSAL HEADED "IN THE
RIGHT DIRECTION"
01 July 2015, 19:38
WHITE HOUSE SAYS BELIEVES THERE IS STRONG BIPARTISAN SUPPORT IN U.S. CONGRESS
FOR LIFTING EMBARGO ON CUBA
01 July 2015, 19:37
EUROGROUP CALL OVER, NO OTHER MEETING PLANNED BEFORE SUNDAY REFERENDUM -
GREEK GOVT OFFICIAL
01 July 2015, 19:26
OBAMA, IN LETTER TO CUBA'S CASTRO, SAYS IS ENCOURAGED BY "RECIPROCAL
INTENTION" TO DEVELOP RESPECTFUL AND COOPERATIVE RELATIONS BETWEEN U.S. AND CUBA
01 July 2015, 19:25
U.S. OFFICIALS SAYS 15-DAY NOTIFICATION FOR OPENING OF EMBASSY WENT TO
CONGRESS WEDNESDAY, OFFICIAL RESTORATION OF DIPLOMATIC TIES BEGINS AT END OF
THAT PERIOD
01 July 2015, 19:16
OFFICIAL SAYS ARRANGEMENT REACHED WITH CUBA ON OPENING EMBASSY IS 'ACCEPTABLE
FOR CARRYING OUT CORE DIPLOMATIC FUNCTIONS'
01 July 2015, 19:13
SENIOR STATE DEPARTMENT OFFICIAL SAYS U.S. EMBASSY IN HAVANA WILL OPERATE
LIKE OTHER EMBASSIES THAT OPERATE IN RESTRICTIVE ENVIRONMENTS
01 July 2015, 19:12
Dollar index trading at 96.04 (+0.53%)
Strength meter (today so far) - Aussie -0.36%, Kiwi -0.44%, Loonie -0.84%.
Strength meter (since last week) - Aussie +0.16%, Kiwi -1.17%, Loonie -1.48%.
AUD/USD -
Trading at 0.766
Trend meter -
Trading at 0.675
Trend meter -
Trading at 1.256
Trend meter -
Strength meter (today so far) - Aussie -0.36%, Kiwi -0.44%, Loonie -0.84%.
Strength meter (since last week) - Aussie +0.16%, Kiwi -1.17%, Loonie -1.48%.
AUD/USD -
Trading at 0.766
Trend meter -
- Long term - Sell, Medium term - Range, Short term - Range
- Long term - 0.60, Medium term - 0.71, Short term - 0.756-0.75
- Long term - 0.87, Medium term - 0.83, Short term - 0.793-0.796
- Building permits are up 2.4% in May on monthly basis and up 17.6% from a year ago.
- Aussie is headed to test the support area, tomorrow's non-farm might prove crucial and might turn out as make or break event.
Trading at 0.675
Trend meter -
- Long term - Sell, Medium term - Range, Short term - Range/sell resistance
- Long term - 0.653, Medium term - 0.65, Short term - 0.65
- Long term - 0.883, Medium term - 0.80-0.805, Short term - 0.737-0.74, Immediate - 0.705
- NIL
- Kiwi remains sell against dollar, as fundamental outlook remains subdued and RBNZ is expected to reduce rates further.
Trading at 1.256
Trend meter -
- Long term - Buy, Medium term - Range, Short term - Range/Buy
- Long term - 1.17, Medium term - 1.1840-1.18, Short term - 1.217-1.213
- Long term - 1.298-1.315, Medium term - 1.30-1.35, Short term - 1.28. Immediate - 1.25 (broken)
- NIL
- Canadian dollar is likely to remain sell against dollar as expectation is building up for further rate cut by BOC amid weakening economic activities.
1 July 2015, 19:11
'Risk assets and the EUR have been broadly stable in Asian hours
regardless of intensifying uncertainty as related to Greece - It appears that
market tensions are unlikely to rise more considerably ahead of Sunday’s
referendum as a “yes” vote still seems more likely, irrespective of Greek PM
Tsipras recommending to vote against creditors’ bailout terms,' Credit
Agricole noted.
'Even if not meant to be, the upcoming referendum may be regarded as a way to express opinion on staying part of the Eurozone. Considering that most recent polls clearly showed a preference of staying within the Eurozone and as this week’s painful introduction of capital controls may support such prospects even further, such a view may gain more traction in the days to come.'
'Although all of the above should prevent risk aversion from rising more considerably, we remain of the view that EUR rallies should be sold. Any correction risk on the back of a more positive Greece-related development should stay limited given the ECB’s aggressive policy stance,' Credit Agricole added
'Even if not meant to be, the upcoming referendum may be regarded as a way to express opinion on staying part of the Eurozone. Considering that most recent polls clearly showed a preference of staying within the Eurozone and as this week’s painful introduction of capital controls may support such prospects even further, such a view may gain more traction in the days to come.'
'Although all of the above should prevent risk aversion from rising more considerably, we remain of the view that EUR rallies should be sold. Any correction risk on the back of a more positive Greece-related development should stay limited given the ECB’s aggressive policy stance,' Credit Agricole added
01 July 2015, 19:10
U.S. DOLLAR EXTENDS GAINS AGAINST SWISS FRANC, HITS FRESH 3-1/2-WEEK HIGH OF
0.94620
Resistance Levels
R1: 1.2575 (23.6% Retracement Level )
R2: 1.2601
R3: 1.2645
Support Levels
S1: 1.2518 (38.2% Retracement level)
S2: 1.2473
S3: 1.2427 (61.18 Retracement level)
01 July 2015, 19:07
- USD/CAD broke resistance Level at 1.2518 ( 36.8% Retracement Level ) and is bouncing above to reach the next resistance level at 1.2575 (23.6% Retracement Level ).
- The currency is trading at 1.2556 level, the immediate support can be seen at 1.2518 (38.2% Retracement level). A break below this level will expose the pair to next support level at 1.2473.
- Major resistance can be found at 1.2575 (23.6% Retracement Level ), a break above this level will exposes it to the 1.2645 handle.
Resistance Levels
R1: 1.2575 (23.6% Retracement Level )
R2: 1.2601
R3: 1.2645
Support Levels
S1: 1.2518 (38.2% Retracement level)
S2: 1.2473
S3: 1.2427 (61.18 Retracement level)
01 July 2015, 18:55
RUSSIA'S MICEX CLOSED AT 1,639.70 -14.85 (-0.90%)
01 July 2015, 18:51
Energy pack is trading in red. Weekly performance at a glance in chart &
table.
Oil (WTI) -
Oil (WTI) -
- WTI has weakened significantly and more after the release of EIA crude
inventory. Today's range $59.1-57.7
- Target for the downside is coming around $50-51/barrel if doji high is not taken out at $62.7. A break above could push prices as high as $70/barrel. $75/barrel remains next target.
- EIA inventory report showed stocks rose by 2.4 million barrels to 465.4 million.
- WTI is currently trading at $57.6/barrel. Immediate support lies at $56-54.6, $51.2-50 and resistance at $63-$65.
- Brent is relatively better performer than WTI, however tensions over Iran deal is weighing on price. Today's range $62.3-63.5
- Brent-WTI spread gained 70 cents today, currently trading at $4.5/barrel. Spread might rise faster id Iran deal remains eluded beyond 9th July.
- Target is coming around $55/barrel, if doji high is not taken out. A break would push it towards $80/barrel.
- Brent is trading at $62.5/barrel. Immediate support lies at 61.8-61.4 area and resistance at $ 70 region.
- Natural gas assaulted and traded above $2.85/mmbtu area, however so far failed to sustain it. Price might target $3.1/mmbtu and $3.5/mmbtu area if support holds at $2.7 and $2.45/mmbtu.
- Natural Gas is currently trading at $2.79/mmbtu. Immediate support lies at $2.7, $2.45 area & resistance at $2.85, $2.93, $3.04, $3.32.
| WTI | -3.36% |
| Brent | -1.04% |
| Natural Gas | +0.83% |
01 July 2015, 18:50
EU'S TUSK SAYS EUROPE CANNOT HELP GREEKS AGAINST THEIR WILL, "LET'S WAIT FOR
REFERENDUM RESULT"
01 July 2015, 18:35
01 July 2015, 18:49
ITALY'S FTSE MIB CLOSED AT 22,923.00 +462.29 (+2.06%)
01 July 2015, 18:40
01 July 2015, 18:40
SWITZERLAND SMI CLOSED AT 8,920.00 +139.09 (+1.58%)
PORTUGAL’S PSI20 UP 1.46 PERCENT AT 5,633.20
01 July 2015, 18:31
SPAIN'S IBEX UP 0.8 PCT
01 July 2015, 18:30
BRITAIN'S FTSE 100 UP 1.2 PCT, FRANCE'S CAC 40 1.9 PCT, GERMANY'S DAX UP 1.9
PCT
01 July 2015, 18:30
BRAZIL W/E FOREIGN EXCHANGE FLOWS* DECREASE TO -3.933 BLN VS PREV -2.929 BLN
01 July 2015, 18:30
EUROPE'S FTSEUROFIRST 300 PROVISIONALLY CLOSES UP 1.5 PCT AT 1,533.14 POINTS
01 July 2015, 18:27
VIENNA - KERRY SAYS MAJOR POWERS, IRAN MAKING PROGRESS BUT SOME VERY
DIFFICULT ISSUES REMAIN
01 July 2015, 18:24
This week, Yen has remained one of the top performing currency as Safe haven
bids have kept it buoyant even against dollar.
However signs are becoming plentiful that stocks are recovering from their Greek hangover.
US benchmark S&P 500 is up 0.5% today, while Dow jones up 0.6%.
Story is similar across European continent. Switzerland is up 1.2%, UK's FTSE 100 is up 1.3%, European blue chip Eurostxx50 is up 1.5%, German DAX is up 1.9%, France's CAC40 is up 1.5%, and Italy's FTSE MIB is up 2.4%.
Story has been similar across Asia. Japan's Nikkei closed 0.5% plus in the morning, Indian benchmark is up 1%, Australian benchmark up 1%.
Above movement in stocks point that Greek remains of lesser concern and risk aversion is fading significantly.
This makes yen very vulnerable, the question which pair to short it against.
Yen can be shorted against combination of currencies such as US dollar and Indian rupee. Rupee has performed very well appreciating against dollar, while others tumble.
Dollar-Yen is currently trading at 122.9 while Yen- Rupee is trading at 0.5166
However signs are becoming plentiful that stocks are recovering from their Greek hangover.
US benchmark S&P 500 is up 0.5% today, while Dow jones up 0.6%.
Story is similar across European continent. Switzerland is up 1.2%, UK's FTSE 100 is up 1.3%, European blue chip Eurostxx50 is up 1.5%, German DAX is up 1.9%, France's CAC40 is up 1.5%, and Italy's FTSE MIB is up 2.4%.
Story has been similar across Asia. Japan's Nikkei closed 0.5% plus in the morning, Indian benchmark is up 1%, Australian benchmark up 1%.
Above movement in stocks point that Greek remains of lesser concern and risk aversion is fading significantly.
This makes yen very vulnerable, the question which pair to short it against.
Yen can be shorted against combination of currencies such as US dollar and Indian rupee. Rupee has performed very well appreciating against dollar, while others tumble.
Dollar-Yen is currently trading at 122.9 while Yen- Rupee is trading at 0.5166
1 July 2015, 18:16
On Wednesday the dollar remained broadly higher against its peers supported
by upbeat U.S. jobs and manufacturing data. Investors meanwhile watch the
situation in Greece.
The Institute for Supply Management said on Wednesday its index of purchasing managers rose to 53.5 last month from 52.8 in May. Economists had expected a more modest uptick to 53.1.
What’s more, a gauge that measures employment levels and hiring intentions jumped 3.8 points to 55.5%. This is the highest since December and suggests manufacturers may boost hiring after hardly any increase in jobs since January.
Payroll processing firm ADP reported on Wednesday that U.S. non-farm private employment rose by 237,000 last month, above expectations for an increase of 218,000.
The economy created 203,000 jobs in May, whose figure was upwardly revised from a previously reported increase of 201,000.
The government on Thursday will release the employment report a day early because of the July 4 holiday.
EUR/USD dropped 0.51% to trade at 1.1089.
In the meantime, Greece's Prime Minister Alexis Tsipras called upon Greeks to vote “no” in the referendum on Greece’s bailout due on Sunday, saying that “no” does not mean exit from the euro, but rather a strong stance to continue the negotiations toward a “sustainable solution” to the Greek debt.
“No does not mean rupture with Europe but return to Europe with values,” Tsipras said. Rumors that he has a secret plan for a Grexit if the “no” vote prevails are “lies” aimed at influencing the outcome of the referendum, he detailed.
Tsipras also tried to calm fears over recent capital controls, promising that salaries, pensions and bank deposits will be guaranteed.
He remained determined to hold a referendum on July 5, but added that he would be open to a new positive proposal coming out of Wednesday’s Eurogroup meeting.
The Institute for Supply Management said on Wednesday its index of purchasing managers rose to 53.5 last month from 52.8 in May. Economists had expected a more modest uptick to 53.1.
What’s more, a gauge that measures employment levels and hiring intentions jumped 3.8 points to 55.5%. This is the highest since December and suggests manufacturers may boost hiring after hardly any increase in jobs since January.
Payroll processing firm ADP reported on Wednesday that U.S. non-farm private employment rose by 237,000 last month, above expectations for an increase of 218,000.
The economy created 203,000 jobs in May, whose figure was upwardly revised from a previously reported increase of 201,000.
The government on Thursday will release the employment report a day early because of the July 4 holiday.
EUR/USD dropped 0.51% to trade at 1.1089.
In the meantime, Greece's Prime Minister Alexis Tsipras called upon Greeks to vote “no” in the referendum on Greece’s bailout due on Sunday, saying that “no” does not mean exit from the euro, but rather a strong stance to continue the negotiations toward a “sustainable solution” to the Greek debt.
“No does not mean rupture with Europe but return to Europe with values,” Tsipras said. Rumors that he has a secret plan for a Grexit if the “no” vote prevails are “lies” aimed at influencing the outcome of the referendum, he detailed.
Tsipras also tried to calm fears over recent capital controls, promising that salaries, pensions and bank deposits will be guaranteed.
He remained determined to hold a referendum on July 5, but added that he would be open to a new positive proposal coming out of Wednesday’s Eurogroup meeting.
01 July 2015, 18:15
OBAMA SAYS AMERICAN ENGAGEMENT WITH CUBA WILL ADVANCE DEMOCRACY AND HUMAN
RIGHTS THERE
01 July 2015, 18:15
IAEA MONTHLY REPORT CONFIRMS IRAN MET REQUIREMENT FOR REDUCING ITS LOW
ENRICHED URANIUM STOCKPILE BY JUNE 30 AS REQUIRED UNDER INTERIM NUCLEAR DEAL
WITH SIX POWER
01 July 2015, 18:14
OBAMA SAYS IT'S TIME FOR CONGRESS TO MOVE FORWARD ON CUBA AND LIFT EMBARGO
01 July 2015, 18:12
IRAN CONTINUES TO COMPLY WITH TERMS OF INTERIM NUCLEAR DEAL WITH WORLD
POWERS, MONTHLY IAEA REPORT SHOWS
01 July 2015, 18:12
OBAMA SAYS THOSE DIFFERENCES INCLUDE FREEDOM OF SPEECH; U.S. WILL CONTINUE TO
SPEAK WHEN IT DISAGREES WITH CUBA OVER VALUES
01 July 2015, 18:12
OBAMA SAYS WILL CONTINUE TO HAVE SERIOUS DIFFERENCES WITH CUBA
01 July 2015, 18:11
OBAMA SAYS WITH THIS CHANGE, U.S. WILL BE ABLE TO ENGAGE BROADLY ACROSS
ISLAND OF CUBA
01 July 2015, 18:11
OBAMA SAYS LATER THIS SUMMER KERRY WILL TRAVEL TO HAVANA TO RAISE FLAG OVER
U.S. EMBASSY THERE
01 July 2015, 18:11
OBAMA SAYS EFFORTS TO ISOLATE CUBA HAD THE OPPOSITE EFFECT
01 July 2015, 17:52
CUBAN GOVERNMENT SAYS UNITED STATES SHOULD RETURN GUANTANAMO BAY MILITARY
BASE TO CUBAN SOVEREIGNTY