Euro found support above its recent lows at 1.1150 despite the lack of any deal between Greece and it's Creditors. It seemed like we were very close to an agreement yesterday, but the IMF threw a wrench into proceedings. Finance Ministers will meet again today, before a meeting of European leaders, although it is unclear if either of these events will mark a major breakthrough. The fact that Euro has stabilized amid this ostensibly more negative news flow supports the view that a negative correlation between EUR and investor sentiment may be emerging.
While the commodity currencies are not the main focus at present, Nzd has been quite the steady trending candidate. Real money has been a good seller for a few weeks, and yesterday we started to see a retracement that could give bears a better entry point. As traders in the Skype trading room know, I'm looking at this week's high/6920s for clues as to whether the trend will reassert itself or not.
1. Who Said What
- Greek debt talks stumble before EU leaders gather – Reuters.
- Japan MoF flow data week-ended June 30 – Japanese buy net Y348.4 bln foreign stocks, Y7.8 bln bills, sell Y892.8 bln bonds; foreign investors sell net Y253.9 bln Japanese stocks, buy Y107.8 bln bonds, Y718.5 bln bills.
- NZ dairy farmers flock to Fonterra’s guaranteed milk price scheme, may opt to lock in farmgate prices at same price as forecast for ‘15/16 – NZ Herald.
- Handelsblatt report that sources suggest EU fin ministers may deny Greece a deal amid frustration at Greece’s unwillingness to compromise.
2. Calendar (CET)
Speakers today (all times GMT):
EU Summit in Brussels (till tomorrow).
IIF Europe Summit in Frankfurt, various speakers (till tomorrow).
07:30 ECB Nouy at Brussels public parliamentary hearing.
08:00 SNB Chair Jordan speech in Lausanne.
09:30 BoE Rule speech at Lisbon conference.
US SecCom Pritzker, USTR Froman speeches at Washington, DC event.
12:00 Fed Gov Tarullo in CFR roundtable discussion in Washington, DC.
13:45 Fed Gov Powell speech in Kansas City.
16:10 BoC DepGov Schembri speech in Windsor.
3. Asian Equity & FX Roundup
Asian equities failed to rally, after the optimism on a Greek deal faded. Nikkei was down 0.2%, ASX was down 0.6%, Shanghai didn't care much and was up 0.5%. As we can see from the daily charts below, EU indices and US indices generally found sellers from key levels yesterday, so although there is hardly any clear trending action, there may be room for further losses before any rebound.
In FX (below) there is again very little clarity. We are still waiting for Nzd and Gbp to reassert their trends. In other news, it looks like the USD might want to continue strengthening...but don't quote me on that.
Good Luck today!
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