EU Open Report - 30.6.2015

What a crazy start to the week! Euro gaps down (logical) but then reverses its gap lower, with few signs of contagion. How to interpret these events? Most likely as a lack of participation and/or commitment since uncertainty on Greek politics should continue to build in the days ahead and there remains potential for a greater degree of contagion across Europe and into other asset markets. As we said yesterday, we're in "hit & run" mode.

The Aussie saw somebuying extends ahead of Stevens, which could set the stage for a reversal upon more dovishness by the RBA. Focus on European developments is clearly stronger and it is not clear that Governor Stevens will comment on policy in his speech in London. However, should the Governor take the opportunity to reiterate that there may be further downside for interest rates or ramp up his verbal intervention on the exchange rate, there could be greater sensitivity than has been the case with similar remarks in the past.

1. Who said What

 - Sources – Juncker makes last-minute offer to Greece – Reuters.

- ECB Coeure – Grexit now a possibility – Les Echos.

-  Japan EconMin Amari- Shouldn’t overestimate effect of Greek debt crisis on  global economy, Japan in midst of emerging from deflation, there will be  periods when economy moves sideways – Reuters.

-  China PBOC lowers benchmark 7-day reverse repo rate 20 bps to 2.5% - Reuters.

-  UK June GfK consumer confidence index +7, 15-year high, +2 eyed, May +1.

- NZ June biz confidence index net -2.3%, lowest in 4+ years, outlook +23.6%, May +15.7%, +32.6%.

2. Calendar

Times are CET, source: Investing.com

3. Asian Equity & FX roundup

Asian equities actually rose slightly, despite the EU and NY sell-off. Nikkei was up 0.4%, ASX flat and the Shanghai composite was up 2.5%.

FX markets were rather subdued overnight, with some activity only in Nzd which dropped on a worse business confidence survey.

Indices are shouting "watch out"...In particular Dow & ES are already 

below june & may lows. That says something...and Vix is boosting higher.

In FX, we continue (for the 3rd week in a row) to highlight

NZD as the clearest trending candidate and Gbp the sturdiest

counterpart. So GbpNzd longs, NzdUsd shorts still look best.