Market Roundup
- IMF signals it could walk away from Greek bailout deal.
- IMF - Massive debt relief for Greece would give economy chance to grow.
- Greece PM Tsipras - When banks reopen depends on when deal ratified.
- China Q2 GDP +1.7% q/q, +7.0% y/y, +1.7/+6.9% eyed, Q1 rev +1.4% q/q (+1.3%).
- China January-June fixed asset investment +11.4% y/y, +11.2% eyed, property +4.6%.
- China June industrial output +6.8% y/y, retail sales +10.6/+6%, +10.2% eyed.
- Toyota May China sales +13.3% y/y, Nissan Jan-May China sales +6.8%.
- Japan China investment -7.8% January-April, '14 -38.8%.
- BOJ leaves policy as is, as eyed, vote 8-1, Kiuchi again lone dissenter, FY '15/16 growth projection tweaked down to +1.7% from 2.0%, CPI +0.7% vs +0.8%.
- KC Fed George - Start rate hikes sooner, have more options.
- Banks face new legal action over FX manipulation.
- Australia July Westpac/MI consumer confidence -3.2% to 92.2, lowest since Dec.
- Australia ABS June new vehicle sales +3.8% m/m, +4% y/y, May -0.8% m/m.
Economic Data Ahead
- (0245 ET/0645 GMT) France June HICP final, unchanged m/m, +0.4% y/y eyed; flash +0.2%, +0.3%.
- (0430 ET/0830 GMT) UK June claimant count, -8.8k eyed; last -6.5k.
- (0430 ET/0830 GMT) UK May ILO unemployment, 5.5% eyed; last 5.5%.
- (0430 ET/0830 GMT) UK May average weekly earnings - 3-mo average, +3.3% eyed; last +2.7%.
- (0430 ET/0830 GMT) UK May ex-bonus, +3.0% eyed; last +2.7%.
- (0500 ET/0900 GMT) Switzerland July ZEW investor sentiment index; last 0.1.
- (0830 ET/1230 GMT) US July NY Fed Empire State manufacturing index, 3.00 eyed; last -1.98.
- (0830 ET/1230 GMT) US June PPI final demand, +0.2% m/m, -0.9% y/y eyed; last +0.5%, -1.1%.
- (0915 ET/1315 GMT) US June industrial output, +0.2% m/m eyed; last -0.2%.
- (0915 ET/1315 GMT) US June capacity utilization, 78.1% eyed; last 78.1%.
Key Events Ahead
- N/A Greece E625 mln 13-week bill, Portugal E1.5-3 bln 6/12-mo bill auctions.
- N/A Greek parliament votes on bailout deal.
- (0330 ET/0730 GMT) Riksbank minutes.
- (0530 ET/0930 GMT) Germany E5 bln 1.0% 2025 Bund auction.
- (0530 ET/0930 GMT) UK DMO GBP1.5 bln 0.125% 2026 index-linked Gilt auction.
- (0730 ET/1130 GMT) EU/Dutch FinMin Dijsselbloem briefs Dutch parliament on Greece.
- (0900 ET/1300 GMT) Luxembourg FinMin Gramegna EU parliament testimony.
- (1000 ET/1400 GMT) FOMC Chair Yellen semi-annual Humphrey-Hawkins House testimony.
- (1000 ET/1400 GMT) BOC policy announcement/15:15 BoC Gov Poloz press conference.
- (1225 ET/1625 GMT) Cleveland Fed Mester speaks at Columbus, Ohio forum.
- (1400 ET/1800 GMT) Fed Beige Book release.
- (1500 ET/1900 GMT) SF Fed Williams speech in Mesa, Arizona/22:00 speaks in Phoenix, Arizona.
FX Recap
EUR/USD is supported around 1.1000 levels and currently trading at 1.0998 levels. It has made intraday high at 1.1014 and low at 1.0990 levels. The shared currency kept its gains and remained around the $1.10 handle, ignoring the latest fall of ZEW economic sentiment index in Germany and Euro zone's industrial production. Today Germany bond auction as well as Euro group meeting will be the focus from Euro zone. Initial support is seen around at 1.0914 and resistance at 1.1243 levels.
USD/JPY is supported above 123.00 levels and posted a high of 123.47 levels. It has made intraday low at 123.38 and currently trading at 123.40 levels. The Bank of Japan made no changes to its current policy settings on Wednesday, but the bank downgraded its economic growth outlook for fiscal 2015. BOJ decided to continue with its current pace of asset purchases on Wednesday, which amounts to around ¥80 trillion per year. Today BOJ downgraded economic growth to 1.7%. Forecasts for growth in the following two years were left unchanged at 1.5% and 0.2% respectively. Near term resistance is seen at 124.57 and support is seen at 120.63 levels.
GBP/USD is supported above $1.5600 levels. It made an intraday high at 1.5652 and low at 1.5628 levels. Pair is currently trading at 1.5645 levels. Yesterday the British pound was boosted by the latest comments from BoE Governor Mark Carney, saying that the time for the first rate hike is moving closer. The latest CPI report from the UK revealed the annual gauge of inflation slid back to zero while the core inflation hit 0.8%, a notch below the last month's reading. Markets now await UK job data release due later today. Wages in the UK are expected to have continued rising comfortably above the current level of inflation in May, while the overall rate of unemployed people is estimated to have remained unchanged, as fewer and fewer people drop out of the jobseekers' allowance scheme. Initial support is seen at 1.5413 and resistance is seen around 1.5734 levels.
USDCHF is supported below 0.9500 levels and trading at 0.9451 levels and made intraday low at 0.9441 and high at 0.9561 levels. Yesterday Switzerland released PPI data with negative numbers at -0.1 % mm vs -0.8% previous release. Now market awaits ZEW investor sentiment data from Switzerland later today. Near term support is seen at 0.9341 levels and resistance is seen at 0.9542 levels.
AUD/USD is supported below 0.7500 levels and trading at 0.7465 levels. It has made intraday high at 0.7487 levels and low at 0.7435 levels. The Chinese data was positive and gives a relief to the Aussie bulls who have taken the price through overnight highs. All three readings were in positive territory with Industrial Production and Retails Sales slightly better and GDP Q/Q 1.7% vs 1.6% and 7% vs 6.9% Y/Y. The Westpac-Melbourne Institute Consumer Sentiment gauge fell 3.2% to 92.2 in July from 95.3 in June. The US session will be in focus with Fed Chair Janet Yellen's speech. Traders will anticipate any news on the number of possible rate hikes this year, but views around the Greek negotiations, volatility in China's equity markets and moves in the USD and energy will also be important. Initial support is seen at 0.7360 and resistance at 0.7647 levels.
