EU Open Report - 2.7.2015

Welcome to NFP-Thursday!

In the US, ADP beat expectations but strength in jobs is growth now well discounted, so the impact on market expectations for the timing of Fed lift-off is still uncertain. As usual, average hourly earnings are the key metric. If they pick up unexpectedly, this could see more impact  than strength in non-farms in isolation. Data would suggest that US economic growth has picked up in Q2 and we expect to see this reflected in a solid June payrolls report today.

In other news, European officials are not willing to compromise on the concessions that Greece is driving for and that negotiations will not reopen until after the referendum this weekend. The latest polls on the referendum show a small margin in favor of a ‘yes’ vote on the creditor’s proposals despites efforts by the Greek government to support ‘no’. More than anything, the price action shows that in the session ahead, EUR is likely to remain captive to headlines, with potential for moves in both directions. Hit & Run mode as we've been saying for a a while now.

1. Who Said What

-  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.

-  China PBOC steps up injection despite improving liquidity – MNI.

-  Fed, industry at odds over bond market liquidity – Reuters.

-  IMF Lagarde – Greece must reform before getting debt relief – Reuters.

- NZ Fonterra GDT price index -5.9% but volumes up at latest auction.

2. Calendar

Cet Time - Souce: Investing.com

3. Asian Equity & FX Roundup

Asian equities were mixed overnight, taking cues from a positive Wall Street close after the Greek Government showed some kind of willingness to meet creditor's demands. Obviously this is all speculation only, since there will be no negotiations prior to the exit polls on sunday.

The Nikkei was up 1%, ASX up 1.4%, Hang Seng up 0.56% and Shanghai was the only market to be negative, down 1.2%.

Nzd was hit overnight after a worse GDT auction, which increases calls for an RBNZ rate cut. Not much else on the radar amongst all the flip-flops going on in Europe.

Good Luck Today!