Deja-vu? This week's FX open followed the same pattern seen the past two weeks: Euro gapped lower on the open, but the dip was smaller and flight to safety was modest.The gap was also closed quickly. European authorities have proposed (forced) tougher measures (more austerity) to Greece and the key issue is whether Greece is able to pass legislation before the deadline on July 15th. European Finance Ministers have suggested that if Greece fails to push through reforms by the 15th, there will be no basis for further negotiations. Personally, I think the political divide has become too large. Tsipras is being shown "the door out" and is being given reason to cross it.
The way things are going, it looks quite clear that the USD is going to be the place to park capital as events come to a close.
1. Who Said What
- Greece talks continue but proving to be exceptionally difficult, Greek parliament must pass reforms by Wednesday, if Germany approves then Bundestag will vote on bailout, Friday earlier for news on deal, weekend more likely, another EU Summit then? – IFR, media.
- French deny EU report of possible bridge loan for Greece – Reuters.
- China June trade surplus $46.54 bln, exports +2.8% y./y, imports -6.1%, $55.7 bln, -0.2% and -15.0% eyed.
- China regulator orders brokerages to review trades following stock rout –RTRS.
2. Calendar
GMT times - Source: FXStreet
3. Asia Equity & FX roundup (via IFR)
• Rise from early 19,911.39 low to 20,111.97, optimism on Greece deal.
• At 20,103.63, index up 323.80 points or 1.64% on day, 20k+ trade again?
• AXJ up too, Shanghai 2.28%, Hang Seng +0.22%, KOSPI +1.39%, STI +0.45%.
• Sensex +0.12% and ASX +0.72% as well.
All eyes & ears on the wires...
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