Posts
08 July 2015, 10:30
The pair is testing a crucial support at 0.7096, any breach below this level
would mean that weaker trend is intact. So long term bears are under complete
control but as of now this currency cross likely to take support at 0.7096 as
many a times it has witnessed to show strength at the same levels and bounce
back. We think valuations at this juncture become poor then it is going to be a
tough call for euro amid Grexit threat.
On YoY basis, industrial output raised by 2.1%, the robust annual growth since April of 2014, and manufacturing was up 1.0%. Sterling has been higher against the broadly weaker euro, with EUR/GBP down 0.16% to 0.7074 from 0.7069 earlier.
The single currency came under pressure ahead of a euro zone summit later in the day which it was hoped would restart negotiations between Greece and its lenders.
The pound fell to session lows against the dollar on Tuesday after data showed that U.K. industrial output rose unexpectedly in May but manufacturing production fell and as heightened risk aversion bolstered dollar demand. GBP/USD fell to lows of 1.5509, the weakest since June 15 from around 1.5530 ahead of the report.
Currency Option basket: Call ladder (EUR/GBP)
We think unless arbitration opportunity that offers chances in cross currency gains, those who have their FX exposures held in euro, they've to find their ways out within euro zone only so as to reduce the further potential downside risks.
Hence, we recommend selling 1M (-1%) in-the-money call, simultaneously buy 1M an at-the-money 0.51 delta call and buy another 1M (1%) out-of-the-money 0.38 delta call.
The combined position should have delta at 0.25 and negative theta close 0.14 or so.
This strategy is likely to fetch an unlimited returns and limited risk when the options trader thinks that the underlying currency will experience significant volatility in the near term.
Maximum returns for the short call ladder strategy is limited if the underlying stock price goes down. In this scenario, maximum profit is limited to the initial credit received since all the long and short calls will expire worthless.
However, if the underlying exchange price rallies explosively, potential profit is unlimited due to the extra long call.
On YoY basis, industrial output raised by 2.1%, the robust annual growth since April of 2014, and manufacturing was up 1.0%. Sterling has been higher against the broadly weaker euro, with EUR/GBP down 0.16% to 0.7074 from 0.7069 earlier.
The single currency came under pressure ahead of a euro zone summit later in the day which it was hoped would restart negotiations between Greece and its lenders.
The pound fell to session lows against the dollar on Tuesday after data showed that U.K. industrial output rose unexpectedly in May but manufacturing production fell and as heightened risk aversion bolstered dollar demand. GBP/USD fell to lows of 1.5509, the weakest since June 15 from around 1.5530 ahead of the report.
Currency Option basket: Call ladder (EUR/GBP)
We think unless arbitration opportunity that offers chances in cross currency gains, those who have their FX exposures held in euro, they've to find their ways out within euro zone only so as to reduce the further potential downside risks.
Hence, we recommend selling 1M (-1%) in-the-money call, simultaneously buy 1M an at-the-money 0.51 delta call and buy another 1M (1%) out-of-the-money 0.38 delta call.
The combined position should have delta at 0.25 and negative theta close 0.14 or so.
This strategy is likely to fetch an unlimited returns and limited risk when the options trader thinks that the underlying currency will experience significant volatility in the near term.
Maximum returns for the short call ladder strategy is limited if the underlying stock price goes down. In this scenario, maximum profit is limited to the initial credit received since all the long and short calls will expire worthless.
However, if the underlying exchange price rallies explosively, potential profit is unlimited due to the extra long call.
08 July 2015, 10:33
Lower copper prices continue taking a toll on the Chilean economy with this
effect being magnified in the past days as the price of this metal has declined
around 7% in just a matter of days.
Keep in mind that copper is Chile's main export product that when added to the fact that China is Chile's main trade partner then this problem has gained importance in the past days.
While Chile has a prudent handling of public finances and has a solid banking system that should keep credit flowing to the private sector, the mining nature of the Chilean economy is struggling to find a recipe to justify new investments in this sector.
The decline in gross fixed investment because of this is now evident in growth prospects for 2015 that according to the estimates should be around 2.4% by year-end, says Commerzbank.
Keep in mind that copper is Chile's main export product that when added to the fact that China is Chile's main trade partner then this problem has gained importance in the past days.
While Chile has a prudent handling of public finances and has a solid banking system that should keep credit flowing to the private sector, the mining nature of the Chilean economy is struggling to find a recipe to justify new investments in this sector.
The decline in gross fixed investment because of this is now evident in growth prospects for 2015 that according to the estimates should be around 2.4% by year-end, says Commerzbank.
08 July 2015, 10:28
The Polish zloty sold off sharply yesterday during trading, with EUR/PLN
approaching 4.22 at one point in the afternoon and although this was part of the
general risk-off move in markets, it did not help the zloty that the leading
candidate of leftist Opposition PiS proposed a bank tax.
It has been suspected for some time now that a PiS victory at the autumn general election would bring losses for banks, either via a bank tax or via forced conversion of FX loans after PiS won the presidential seat, new President Duda also proposed a large-scale conversion of FX loans at originally contracted exchange rates, which would mean substantial losses for banks.
Yesterday, PiS PM candidate, Ms Beata Szydlo, became more specific and proposed a bank tax of 0.39% of assets; this tax would apply to all banks and financial institutions and would be a permanent tax. Hungary's bank tax is currently levied at 0.53% of assets, but is being scaled down to 0.31% by 2016.
Just as is the case in Hungary, PiS also wants to impose sector taxes, such as on retail chains. Such policy proposals by the party which is leading widely in all polls are a strong cause for concern for Polish asset prices and the zloty in coming months as these would constitute a radical policy departure from current policies, says Commerzbank.
It has been suspected for some time now that a PiS victory at the autumn general election would bring losses for banks, either via a bank tax or via forced conversion of FX loans after PiS won the presidential seat, new President Duda also proposed a large-scale conversion of FX loans at originally contracted exchange rates, which would mean substantial losses for banks.
Yesterday, PiS PM candidate, Ms Beata Szydlo, became more specific and proposed a bank tax of 0.39% of assets; this tax would apply to all banks and financial institutions and would be a permanent tax. Hungary's bank tax is currently levied at 0.53% of assets, but is being scaled down to 0.31% by 2016.
Just as is the case in Hungary, PiS also wants to impose sector taxes, such as on retail chains. Such policy proposals by the party which is leading widely in all polls are a strong cause for concern for Polish asset prices and the zloty in coming months as these would constitute a radical policy departure from current policies, says Commerzbank.
08 July 2015, 10:24
GREEK FINANCE MINISTRY DISMISSES REPORT THAT COUNTRY PREPARING IOUS TO PAY
STATE PENSIONS AND WAGES
08 July 2015, 07:33
With yesterday's emergency Eurogroup meeting and euro area leaders' summit
re-opening talks but imparting little concrete direction, an apparent gap
between the positions of Greece and its creditors in the aftermath of the
referendum remains intact. A discussion of Greek proposals at today's Eurogroup
conference call could help to progress matters, although it would likely
represent only the beginning of a formal ESM application process that could take
some time, says Lloyds Bank.
Notwithstanding the lingering Grexit anxieties, Chancellor Osborne's Budget statement is likely to provide a domestic focus. Of particular interest will be the profile of the planned fiscal consolidation through to 2020. Relative to the March 2015 Budget plans, Lloyds Bank anticipates, a smoother profile permitted both by improving public finance outturns for 2015/16 so far, and an earlier start to the consolidation, with additional savings already identified for the current fiscal year.
Nevertheless, as Osborne will need to balance the fiscal implications of wanting to adhere to Conservative manifesto plans against those implied by his proposed update to his own Charter of Fiscal Responsibility, the precise profile of the consolidation - and therefore its drag on the economy - remains mostly an uncertain matter of political judgment, adds Lloyds Bank.
Of global interest will also be the minutes of the FOMC's June meeting. Coming in the aftermath of a meeting with a press conference and published economic projections, these are of more limited incremental value. Nevertheless, alongside the slew of upcoming Fed speakers - including Williams later this evening and Yellen on Friday - the impact of Grexit concerns through the FOMC's lens of 'financial and international developments' will be of particular interest.
Notwithstanding the lingering Grexit anxieties, Chancellor Osborne's Budget statement is likely to provide a domestic focus. Of particular interest will be the profile of the planned fiscal consolidation through to 2020. Relative to the March 2015 Budget plans, Lloyds Bank anticipates, a smoother profile permitted both by improving public finance outturns for 2015/16 so far, and an earlier start to the consolidation, with additional savings already identified for the current fiscal year.
Nevertheless, as Osborne will need to balance the fiscal implications of wanting to adhere to Conservative manifesto plans against those implied by his proposed update to his own Charter of Fiscal Responsibility, the precise profile of the consolidation - and therefore its drag on the economy - remains mostly an uncertain matter of political judgment, adds Lloyds Bank.
Of global interest will also be the minutes of the FOMC's June meeting. Coming in the aftermath of a meeting with a press conference and published economic projections, these are of more limited incremental value. Nevertheless, alongside the slew of upcoming Fed speakers - including Williams later this evening and Yellen on Friday - the impact of Grexit concerns through the FOMC's lens of 'financial and international developments' will be of particular interest.
08 July 2015, 07:29
VIETNAM'S VN INDEX DROPS 2.06 PCT, MOST SHARES DOWN
08 July 2015, 07:13
INDONESIA FIN MIN OFFICIAL SAYS RUPIAH TO REMAIN UNDER PRESSURE IN THE SECOND
HALF OF THIS YEAR
08 July 2015, 07:07
CHINA SECURITIES REGULATOR SAYS SECURITIES FINANCE CORP HAS OBTAINED
LIQUIDITY FROM CENTRAL BANK
08 July 2015, 06:59
Precious metals prices have been fairly rangebound in recent months, with
fluctuations tied closely to expectations on when the Federal Reserve will begin
its rate hiking cycle. The Fed might move later this year, keeping precious
metals prices under pressure in the near term.
However, ongoing improvements in economic growth around the globe will likely lead to a weakening in the U.S. dollar next year, which should be supportive for precious metals.
"Gold prices might be seen rising to US$1300/oz by the end of 2016", forecasts TD Economics.
However, ongoing improvements in economic growth around the globe will likely lead to a weakening in the U.S. dollar next year, which should be supportive for precious metals.
"Gold prices might be seen rising to US$1300/oz by the end of 2016", forecasts TD Economics.
08 July 2015, 06:55
The natural gas market is quite bearish, with healthy storage levels,
elevated U.S. production and a generally subdued environment for energy
commodities keeping prices under the US$3 per MMBtu mark.
Going forward, the upside for natural gas prices is limited, as the market dynamics are unlikely to change much in the near term. Seasonal demand increases should drive natural gas prices higher by the end of this year, but they will likely remain below US$3.50 per MMBtu, says TD Economics.
Going forward, the upside for natural gas prices is limited, as the market dynamics are unlikely to change much in the near term. Seasonal demand increases should drive natural gas prices higher by the end of this year, but they will likely remain below US$3.50 per MMBtu, says TD Economics.
08 July 2015, 06:55
TAIWAN STOCKS WIDEN FALL TO 3 PCT
08 July 2015, 06:54
Crude oil prices rebounded from the first quarter trough of US$43 per barrel,
and hovered around US$60 per barrel through most of the second quarter, before
sliding back to US$52 this week. The rise in prices was due largely to a change
in sentiment, as market dynamics have not changed - the world is still awash in
oil.
Global production is expected to slow down in the second half of the year and into 2016, which, combined with an expected pick up in world demand, should help bring the market into a more balanced position. This will be supportive for prices over the next 12-18 months, although significant downside risk remains, says TD Economics.
Global production is expected to slow down in the second half of the year and into 2016, which, combined with an expected pick up in world demand, should help bring the market into a more balanced position. This will be supportive for prices over the next 12-18 months, although significant downside risk remains, says TD Economics.
08 July 2015, 06:54
- Move down to 121.96 followed by rebound only to 122.25, pushing down again
- Market very much risk off, Shanghai Composite off early low but still down large
- Initial support at 121.70 on base of daily Ichi cloud
- Stops below 121.70 large, break to target ascending 100-DMA at 121.06 level
08 July 2015, 06:51
After another futile EU summit, new meetings and new final deadlines have
been scheduled. Thursday is now the deadline for the Greek government to set out
its proposals for a comprehensive and specific reform agenda for
assessment.
European leaders have also given an ultimatum for a deal by Sunday's Heads of State meeting, at which it will be decided whether Greece gets another bailout or leaves the Eurozone.
European leaders have also given an ultimatum for a deal by Sunday's Heads of State meeting, at which it will be decided whether Greece gets another bailout or leaves the Eurozone.
08 July 2015, 06:19
The Eurogroup meeting and the Euro summit on 7 July were inconclusive.
Presidents Tusk and Juncker explained after the summit that there was no
agreement and that the Greek position has been weakened after the
referendum.
Following the Greek referendum, Heads of State and Governments have asked Greek PM Tsipras to come up with some clear and detailed proposals for a third programme by Thursday. The Eurogroup will then review these proposals and the EU Council will meet in its full composition (EU28) next Sunday to decide if conditions are met to start negotiations on this third bailout.
President Hollande mentioned that, in the meantime, the ECB is expected to stay sufficiently accommodative to support the Greek banking system until then. During the press conference, Juncker said explicitly that a black scenario was not excluded, and that "Grexit" was a possibility. A stance shared by at least Mr Hollande and Mrs Merkel.
A third programme (for two years) would include a short-term bridge program to face the summer repayment, to which would be attached specific conditionalities, rather focused on short-term public finances, while conditionalites for the longer run would be more biased towards structural reforms. Angela Merkel specified that debt relief discussion will not come before October.
Following the Greek referendum, Heads of State and Governments have asked Greek PM Tsipras to come up with some clear and detailed proposals for a third programme by Thursday. The Eurogroup will then review these proposals and the EU Council will meet in its full composition (EU28) next Sunday to decide if conditions are met to start negotiations on this third bailout.
President Hollande mentioned that, in the meantime, the ECB is expected to stay sufficiently accommodative to support the Greek banking system until then. During the press conference, Juncker said explicitly that a black scenario was not excluded, and that "Grexit" was a possibility. A stance shared by at least Mr Hollande and Mrs Merkel.
A third programme (for two years) would include a short-term bridge program to face the summer repayment, to which would be attached specific conditionalities, rather focused on short-term public finances, while conditionalites for the longer run would be more biased towards structural reforms. Angela Merkel specified that debt relief discussion will not come before October.
08 July 2015, 06:00
SOUTH KOREA JUL L-MONEY SUPPLY GROWTH INCREASE TO +9.5 % VS PREV 9.3 %
08 July 2015, 05:06
SHARES OF CHINESE COMPANIES LISTED IN HK FALL CLOSE TO 6 PCT
08 July 2015, 04:37
TAIWAN STOCKS DOWN JUST OVER 2 PERCENT
08 July 2015, 03:01
SEOUL SHARES OPEN UP 0.27 PCT
08 July 2015, 03:00
TOKYO'S NIKKEI SHARE AVERAGE OPENS DOWN 0.46 PCT AT 20,282.49
08 July 2015, 03:00
TOKYO'S NIKKEI SHARE AVERAGE OPENS DOWN 0.46 PCT AT 20,282.49
08 July 2015, 02:53
A recovery in house sales in the Netherlands will increase the proceeds that
originators recover in cases of foreclosure, reinforcing the stable performance
of the Dutch residential mortgage-backed securities (RMBS) market, says Moody's
Investors Service in a special report published today. Moody's forecasts a
maximum house price increase of up to 5% in 2015.
"The Netherlands' housing market has gathered momentum, growing more robust against a backdrop of rising consumer confidence and growing economy. We expect that real GDP will increase by 1.7% in 2015 and that unemployment will remain low, further supporting borrower affordability and lessening the likelihood of mortgage arrears," observes Jeroen Heijdeman, a Moody's Assistant Vice President -- Analyst and author of the report.
"However, we note that a reduction in the maximum allowed loan-to-value (LTV) ratio in 2016 and the fact that approximately a third of existing home owners remain in negative equity will moderate the pace of the housing market's recovery," he says.
The new report: "Surging Sales Boost the Dutch Housing Market's Recovery and Raise Recovery Prospects in RMBS Deals" is available on www.moodys.com at http://www.moodys.com/viewresearchdoc.aspx?docid=PBS_1006200.
Available data show that a 16% rise in house sales in the first five months of 2015 has boosted the Dutch house price index, which has risen by 2.6% year-on-year. On a 12-month rolling basis, 31% more homes were sold in total as of May 2015.
The rating agency says borrowers will continue to benefit from low interest rates and increased lender competition. Moody's expect delinquencies to remain stable, with average arrears of 60+ days in the range of 0.50% to 1.50% in 2015-2016. Loan-by-loan foreclosure data from key Dutch RMBS originators provides evidence of increasing average recovery ratios (and therefore decreasing losses) from property sales since 2012. At the same time, the volume of property work-outs is decreasing, demonstrating the market's recovery.
Moody's forecasts that further tightening of underwriting criteria and the high proportion of negative-equity home owners will limit the recovery's speed in 2016. The maximum LTV ratio is set to decline gradually to 100% in 2018, which is high by international standards. Excluding mortgage-linked repayment policies, approximately a third of Dutch homeowners are in negative equity, where an outstanding mortgage loan is greater than the property's updated value. In view of these factors, Moody's expect a more moderate recovery in 2016 after an initial, more significant house price increase. With clear government measures in place to date, a further decline in maximum LTV ratios could also dampen the recovery path, with potentially fewer first-time buyers.
"The Netherlands' housing market has gathered momentum, growing more robust against a backdrop of rising consumer confidence and growing economy. We expect that real GDP will increase by 1.7% in 2015 and that unemployment will remain low, further supporting borrower affordability and lessening the likelihood of mortgage arrears," observes Jeroen Heijdeman, a Moody's Assistant Vice President -- Analyst and author of the report.
"However, we note that a reduction in the maximum allowed loan-to-value (LTV) ratio in 2016 and the fact that approximately a third of existing home owners remain in negative equity will moderate the pace of the housing market's recovery," he says.
The new report: "Surging Sales Boost the Dutch Housing Market's Recovery and Raise Recovery Prospects in RMBS Deals" is available on www.moodys.com at http://www.moodys.com/viewresearchdoc.aspx?docid=PBS_1006200.
Available data show that a 16% rise in house sales in the first five months of 2015 has boosted the Dutch house price index, which has risen by 2.6% year-on-year. On a 12-month rolling basis, 31% more homes were sold in total as of May 2015.
The rating agency says borrowers will continue to benefit from low interest rates and increased lender competition. Moody's expect delinquencies to remain stable, with average arrears of 60+ days in the range of 0.50% to 1.50% in 2015-2016. Loan-by-loan foreclosure data from key Dutch RMBS originators provides evidence of increasing average recovery ratios (and therefore decreasing losses) from property sales since 2012. At the same time, the volume of property work-outs is decreasing, demonstrating the market's recovery.
Moody's forecasts that further tightening of underwriting criteria and the high proportion of negative-equity home owners will limit the recovery's speed in 2016. The maximum LTV ratio is set to decline gradually to 100% in 2018, which is high by international standards. Excluding mortgage-linked repayment policies, approximately a third of Dutch homeowners are in negative equity, where an outstanding mortgage loan is greater than the property's updated value. In view of these factors, Moody's expect a more moderate recovery in 2016 after an initial, more significant house price increase. With clear government measures in place to date, a further decline in maximum LTV ratios could also dampen the recovery path, with potentially fewer first-time buyers.
08 July 2015, 02:50
JAPAN MAY CURRENT ACCOUNT NSA JPY* INCREASE TO +1880.9 BLN JPY (FCAST 1542.0
BLN JPY) VS PREV 1326.4 BLN JPY
08 July 2015, 02:50
JAPAN JUN BANK LENDING YY DECREASE TO 2.5 % VS PREV 2.6 %
08 July 2015, 02:31
Market Roundup
No Significant Events
Currency Summaries
EUR/USD
EUR/USD is supported below 1.0915 levels and currently trading at 1.1035 levels. It has made session high at 1.1050 and low at 1.0915 levels. The euro fell to five week low against the dollar in early US session, US Trade Balance (May) came slightly better at -41.87B against -42.60B, JOLTs Job Openings (May) printed 5.363M actual against 5.350M forecast. In the late US session Euro rallied towards 1.1050 levels due to speculation of Greece reaching a deal soon. The pair is retreating back towards 1.0915 support level. To the upside, immediate resistance can be seen at 1.1050. To the downside, support levels are located 1.1000, 1.0915. The pair fell almost 130 pips today and the bearish sentiment for this pair is set to continue further towards 1.0890 level.
GBP/USD
GBP/USD is supported below 1.5410 levels. It made an intraday high at 1.5461 and low at 1.5410 levels. Pair is currently trading at 1.5461 levels. British Pound has fell massively after poor manufacturing production was released, The GBP hit one-month low against the safe haven strengthened U.S. dollar. The pairs fall was also influenced by lingering Greek issues and Chinese equity volatility. Today George Osborne, will present a new budget, during the European session. Traders expect Osborne to cut welfare spend by GBP 12b. The pair is trading below 50 SMA, the pair is set to continue its bearish momentum towards 1.5400 and later towards 1.5350. Immediate resistance can be found at 1. the downside immediate support lies at 1.5410.
AUD/USD
AUD/USD is supported below 0.7397 levels and is trading at 0.7442 levels. It made session high at 0.7475 levels and low at 0.7397 levels. The Reserve Bank of Australia held interest rates at record lows, by holding the cash rate at 2%. The Aussie dollar is surrounded by uncertainty in Greece and China. The Aussie dollar is also been dragged by falling iron ore prices which has fallen below $50 per metric tons. Due to various uncertainties attached to this pair, it is set to continue its bearish momentum in the short term. To the upside immediate resistance can be seen at 0.7465 level, to the downside immediate support can be seen at 0.7395.
USDCHF
USDCHF is supported above 0.9432 levels and is trading at 0.9468 levels. it made session low at 0.9430 and high at 0.9477 levels. The pair hit one month high after it peaked towards 0.9510 level. The pair is currently trading at 0.9467 level. Greek drama remains unresolved, rumors are spreading about Greece that note, the Eurozone negotiating a short term deal on Greece by Sunday. Talks with Greece is taking center stage with creditors waiting for new proposal from Greece government. The pair is expected to advance further to higher levels. To the upside immediate resistance can be found at 0. the downside immediate support lies at 0.9430.
- Eurozone summit possible on Sunday to back plan for Greece-(Sources)
- Irish fin min sees acceptance for reprofiling of Greek debt
- Obama agreed with Merkel on need for durable deal with Greece (MNSI)
- Greece plans new application to the ESM for financial aid (Germany's Handelsblatt)
- Greece may submit new aid proposal Wednesday
- New Greek proposal improves on last week's offer (Greek official)
- Eurogroup's Dijsselbloem says will do whatever it takes to strengthen EZ, keep it together
- Greece's Tsipras to meet Merkel & Hollande before EU Summit
- Finland's Stubb says EZ not looking at bridge finance for Greeks at this stage
- ECB's Rimsevics says introduction of another currency in Greece is most realistic scenario
- UK's NIESR estimates economy grew 0.7 pct in Q2, expects BOE to begin rate hikes in early '16
- Canada's Oliver says Canada in a fragile econ environment, getting repeated evidence of that
- US JOLTS Job Openings May +5.363m, f/c 5.350m, +5.334m-prev
- CA Trade Balance CAD May -3.34b, f/c -2.50b, -2.99b-prev
- BR IGP-DI Inflation Index* Jun 0.68%, f/c 0.71%, 0.40%-prev
- MX Cons Confidence Jun 94.7, 92-prev, hits 7-mos high on rising consumer demand
- 23:50 JP Bank Lending YY Jun 2.60%-prev
- 23:50 JP Current Account NSA JPY May f/c 1542.0b, 1326.4b-prev
- 05:00 JP Economy Watchers Poll Jun 53.3-prev
- 22:00 NZ Govt Optg Balance May 180.70%-prev
- 22:00 NZ Govt. Monthly Debt May 27.00%-prev
No Significant Events
Currency Summaries
EUR/USD
EUR/USD is supported below 1.0915 levels and currently trading at 1.1035 levels. It has made session high at 1.1050 and low at 1.0915 levels. The euro fell to five week low against the dollar in early US session, US Trade Balance (May) came slightly better at -41.87B against -42.60B, JOLTs Job Openings (May) printed 5.363M actual against 5.350M forecast. In the late US session Euro rallied towards 1.1050 levels due to speculation of Greece reaching a deal soon. The pair is retreating back towards 1.0915 support level. To the upside, immediate resistance can be seen at 1.1050. To the downside, support levels are located 1.1000, 1.0915. The pair fell almost 130 pips today and the bearish sentiment for this pair is set to continue further towards 1.0890 level.
GBP/USD
GBP/USD is supported below 1.5410 levels. It made an intraday high at 1.5461 and low at 1.5410 levels. Pair is currently trading at 1.5461 levels. British Pound has fell massively after poor manufacturing production was released, The GBP hit one-month low against the safe haven strengthened U.S. dollar. The pairs fall was also influenced by lingering Greek issues and Chinese equity volatility. Today George Osborne, will present a new budget, during the European session. Traders expect Osborne to cut welfare spend by GBP 12b. The pair is trading below 50 SMA, the pair is set to continue its bearish momentum towards 1.5400 and later towards 1.5350. Immediate resistance can be found at 1. the downside immediate support lies at 1.5410.
AUD/USD
AUD/USD is supported below 0.7397 levels and is trading at 0.7442 levels. It made session high at 0.7475 levels and low at 0.7397 levels. The Reserve Bank of Australia held interest rates at record lows, by holding the cash rate at 2%. The Aussie dollar is surrounded by uncertainty in Greece and China. The Aussie dollar is also been dragged by falling iron ore prices which has fallen below $50 per metric tons. Due to various uncertainties attached to this pair, it is set to continue its bearish momentum in the short term. To the upside immediate resistance can be seen at 0.7465 level, to the downside immediate support can be seen at 0.7395.
USDCHF
USDCHF is supported above 0.9432 levels and is trading at 0.9468 levels. it made session low at 0.9430 and high at 0.9477 levels. The pair hit one month high after it peaked towards 0.9510 level. The pair is currently trading at 0.9467 level. Greek drama remains unresolved, rumors are spreading about Greece that note, the Eurozone negotiating a short term deal on Greece by Sunday. Talks with Greece is taking center stage with creditors waiting for new proposal from Greece government. The pair is expected to advance further to higher levels. To the upside immediate resistance can be found at 0. the downside immediate support lies at 0.9430.
08 July 2015, 01:55
BOJ: banks' reserve balance at 173.7 trln at end of day
08 July 2015, 01:35
FORMER VIRGINIA GOVERNOR JIM GILMORE SAYS HE PLANS TO JOIN THE RACE FOR THE
REPUBLICAN PRESIDENTIAL NOMINATION -RICHMOND TIMES-DISPATCH
08 July 2015, 01:32
The Eurogroup meeting and the Euro summit on 7 July were inconclusive.
Presidents Tusk and Juncker explained after the summit that there was no
agreement and that the Greek position has been weakened after the referendum.
Following the Greek referendum, Heads of State and Governments have asked Greek
PM Tsipras to come up with some clear and detailed proposals for a third
programme by Thursday.
The Eurogroup will then review these proposals and the EU Council will meet in its full composition (EU28) next Sunday to decide if conditions are met to start negotiations on this third bailout. President Hollande mentioned that, in the meantime, the ECB is expected to stay sufficiently accommodative to support the Greek banking system until then. During the press conference, Juncker said explicitly that a black scenario was not excluded, and that "Grexit" was a possibility. A stance shared by at least Mr Hollande and Mrs Merkel.
A third programme (for two years) would include a short-term bridge program to face the summer repayment, to which would be attached specific conditionalities, rather focused on short-term public finances, while conditionalites for the longer run would be more biased towards structural reforms. Angela Merkel specified that debt relief discussion will not come before October.
"We retain our view that EMU exit is the most likely scenario. Agreeing on a programme on the basis of Greek reforms in exchange for European-OSI with the current Greek government is at this point extremely difficult. First, the strong rejection by the Greeks at the referendum sends the message that a deal with the Institutions is not wanted on the terms presented over one week ago. Second, an improved deal for the Greeks would be a very difficult sell at home for EA countries, especially for Germany to get it through the Bundestag or in Spain ahead of the general election", says Barclays.
The Eurogroup will then review these proposals and the EU Council will meet in its full composition (EU28) next Sunday to decide if conditions are met to start negotiations on this third bailout. President Hollande mentioned that, in the meantime, the ECB is expected to stay sufficiently accommodative to support the Greek banking system until then. During the press conference, Juncker said explicitly that a black scenario was not excluded, and that "Grexit" was a possibility. A stance shared by at least Mr Hollande and Mrs Merkel.
A third programme (for two years) would include a short-term bridge program to face the summer repayment, to which would be attached specific conditionalities, rather focused on short-term public finances, while conditionalites for the longer run would be more biased towards structural reforms. Angela Merkel specified that debt relief discussion will not come before October.
"We retain our view that EMU exit is the most likely scenario. Agreeing on a programme on the basis of Greek reforms in exchange for European-OSI with the current Greek government is at this point extremely difficult. First, the strong rejection by the Greeks at the referendum sends the message that a deal with the Institutions is not wanted on the terms presented over one week ago. Second, an improved deal for the Greeks would be a very difficult sell at home for EA countries, especially for Germany to get it through the Bundestag or in Spain ahead of the general election", says Barclays.
08 July 2015, 01:17
US trade for May showed a small deterioration in the deficit from April, but
beat expectations at -$41.87bn vs. est. -$42.70bn. Details show real exports
tracking +5.1% q/q ann. and imports at -1.4%. That implies a trade contribution
of about +0.9pp in Q2-which fits with expectations for trade to be a strong
driver of Q2 topline growth.
Tonight we get the June FOMC minutes where the comments are expected to reflect the reality of lower GDP (following a soft Q1) but also a tilt toward a September liftoff. Keep in mind nearly 60% of Fed members are penciling in at least 2 hikes this year (i.e a Sep start) and 90% are looking for at least one hike.
"despite the modest mark lower in the dots and perhaps a tighter vote, we think the risk is that the minutes are perceived to be marginally hawkish",says RBC Capital Markets.
Tonight we get the June FOMC minutes where the comments are expected to reflect the reality of lower GDP (following a soft Q1) but also a tilt toward a September liftoff. Keep in mind nearly 60% of Fed members are penciling in at least 2 hikes this year (i.e a Sep start) and 90% are looking for at least one hike.
"despite the modest mark lower in the dots and perhaps a tighter vote, we think the risk is that the minutes are perceived to be marginally hawkish",says RBC Capital Markets.
08 July 2015, 01:01
NZ's NZX 50 OPENS AT 5804.650 POINTS, UP 0.026 PCT
08 July 2015, 01:00
NEW ZEALAND GOVT NET OPERATING SURPLUS (OBEGAL) TO MAY NZ$1.176 BLN, +609 PCT
VS FCAST
08 July 2015, 00:52
Canadian merchandise trade for May was much worse than expected, posting a
wider 3.34bn deficit (est 2.55bn) from 2.99bn in April. That's the second
largest on record after the extreme set in March. Details were weak as well with
a big drop in exports driving the deficit.
What's most important is that in real terms, nonenergy exports were down 2.7%y/y-which certainly does not fit with the BoC's rotation story. If we assume June trade is flat, the tracking for trade impact on Q2 GDP is about 1.5pp-much worse than BoC had been looking for. This report adds to expectations for a BoC cut next week, and markets have priced in another 1-2bps. That leaves the implied probability at about 50% now
What's most important is that in real terms, nonenergy exports were down 2.7%y/y-which certainly does not fit with the BoC's rotation story. If we assume June trade is flat, the tracking for trade impact on Q2 GDP is about 1.5pp-much worse than BoC had been looking for. This report adds to expectations for a BoC cut next week, and markets have priced in another 1-2bps. That leaves the implied probability at about 50% now
08 July 2015, 00:41
United Kingdom headline industrial production was stronger than expected at
0.4%m/m (cons -0.2%m/m) but a lot of the strength came from oil and gas
extraction which is very volatile. The manufacturing production component (a
better underlying indicator) was weak at -0.6% m/m.
The manufacturing PMI has been stumbling of late but even so this looks poor. In terms of GDP for Q2 though, it is the headline IP number which matters and this is upside news from that perspective.
Tonight we get the UK Summer Budget where the takeaway is expected to be that the new govt looks to do more, sooner in terms of cutting the deficit and welfare budget. That means a considerably reduced borrowing target for 2015-16.
The manufacturing PMI has been stumbling of late but even so this looks poor. In terms of GDP for Q2 though, it is the headline IP number which matters and this is upside news from that perspective.
Tonight we get the UK Summer Budget where the takeaway is expected to be that the new govt looks to do more, sooner in terms of cutting the deficit and welfare budget. That means a considerably reduced borrowing target for 2015-16.
08 July 2015, 00:20
CLINTON SAYS SAN FRANCISCO MADE A MISTAKE IN NOT FOLLOWING HOMELAND SECURITY
RECOMMENDATION TO DEPORT ILLEGAL IMMIGRANT LATER ACCUSED OF MURDER
08 July 2015, 00:17
GREEK PM TSIPRAS SAYS SEES EURO ZONE UNDERSTANDS PROBLEM NOT JUST A GREEK
PROBLEM BUT A EUROPEAN PROBLEM
08 July 2015, 00:16
GREEK PM TSIPRAS SAYS AIMS FOR "FINAL EXIT FROM THE CRISIS"
08 July 2015, 00:15
GREEK PM TSIPRAS SAYS PROPOSAL INCLUDES CREDIBLE REFORMS IN RETURN FOR
COMMITMENT TO ADEQUATE FUNDING
08 July 2015, 00:07
HILLARY CLINTON SAYS WILL MAKE SPEECH LAYING OUT ECONOMIC PROPOSALS ON MONDAY