- Euro lower on Greek turmoil, plays in between from 1.0958 to 1.1057 levels.
- EUR/JPY offered through London, hits 134.40 from 135.67.
- GBP/USD hits 3 week low at 1.5453. 1.5610 was the Asian high.
- AUD/USD hits fresh 6 year low at 0.7417, from 0.7502.
- Oil currencies hurt again, NOK falls below 9.00 vs EUR, Brent of its lows but vulnerable.
- France PM- France doing everything and will do everything for Greece to stay in the euro zone.
- EU Juncker- Greek govt calling commission 'terrorists' is not acceptable.
- ECB- ELA must not present 'obvious' monetary financing concern.
- ECB- ELA must not increase risk of moral hazard.
- S&P- Greece may default on debt payment as early as this week.
- RBA leaves rates at 2 pct as expected following May cut.
- UK May Industrial output 0.4% m/m, 2.1% y/y vs previous 0.3%revised/1.2%. -0.2%/1.6% expected.
- UK May Manufacturing output -0.6% m/m, 1.0% y/y vs previous -0.4%/0.1% revised. 0.1%/1.8% expected.
- Switzerland June Unemployment rate unadjusted 3.1% vs previous 3.2%. Adjusted 3.3% vs previous 3.3%.
- Switzerland FX reserves edge lower in June to 516.240bln vs 517.718bln in May.
- (0830 ET/1230 GMT) US International Trade (May consensus -$42.6 bn, previous -$40.9 bn.
- (1000 ET/1400 GMT) Job Openings (May) previous 5.376 mn.
- (1500 ET/1900 GMT) Consumer Credit (May) consensus +$18.5 bn, previous +$20.54 bn.
Key Events Ahead
- (0700 ET/1100 GMT) Euro group meeting on Greece.
- (0945 ET/1345 GMT) Fed Trade operation 15-year Fannie Mae/Freddie Mac (max $600 mn).
- (1145 ET/1545 GMT) Fed Trade operation 30-year Ginnie Mae (max $925 mn).
- (1200 ET/1600 GMT) EU summit.
FX Recap
EUR/USD is supported below 1.1000 levels and currently trading at 1.0980 levels. It has made intraday high at 1.1057 and low at 1.0957 levels. The euro fell nearly 1 percent against a buoyant dollar on Tuesday, as German 10-year Bund yields edged lower and interest rate differentials moved against the common currency. Against the dollar, the euro was at $1.0946, a 5-week low, the dollar index rose 0.7 percent to 96.903, a one-month high. The pair cracked the psychological support of $1.10 during the London session, with investors buying the greenback on risk-off induced capital flows. The safe haven German bunds ticked higher, pushing the yields lower. The benchmark 10-year bund yield is down more than 5 basis points. Meanwhile, the periphery nation's bond yields are relatively resilient. The investors remain focused on the EU summit. It remains to be seen if the summit is successful in reaching a deal with Greece after the ECB maintained its ELA unchanged for Greek banks. Later in the session, US trade balance data will be released, so better results might spur some dollar buying. Initial support is seen around at 1.0914 and resistance at 1.1171 levels. Option expiries are at 1.1000 (646M), 1.1090-1.1100 (727M), 1.1125 (405M).
USD/JPY is supported above 122.00 levels and posted a high of 122.87 levels. It has made intraday low at 122.47 and currently trading at 122.55 levels. The major edged lower despite the persistent strength in the US dollar versus its major competitors largely backed by tumbling EUR/USD. The US dollar index, measuring the relative strength of the greenback against a basket of six major currencies, trades 0.61% higher 97. Moreover, weakening EUR/USD on the back of Grexit fears continues to boost the upside in the greenback. Later today, markets await Euro group meetings with Greece on the top of the Agenda while a set of US macro data will also be eyed. Near term resistance is seen at 124.57 and support is seen at 121.48 levels. Option expiries are at 122.00 (1.6BLN), 122.50 (745M), 124.00 (1.5BLN).
GBP/USD is supported below $1.5600 levels. It made an intraday high at 1.5606 and low at 1.5452 levels. Pair is currently trading at 1.5460 levels. The British pound remained trading with losses following a mixed outcome of UK industrial and manufacturing production data for May. UK industrial production surprisingly rose 0.4% in May on a monthly basis compared to a 0.3% increase in April. Markets expected the gauge to decline by 0.2%. UK manufacturing declined 0.6% in May following unexpected decline by 0.4% in the previous month. Markets now turn their focus towards Euro Summit for fresh insights while the US will get the attention with US May Trade Balance eyed along with JOLTS Job Openings. Initial support is seen at 1.5367 and resistance is seen around 1.5737 levels. Option expiry is at 1.5700 (527M).
USDCHF is supported above 0.9400 levels and trading at 0.9476 levels and made intraday low at 0.9419 and high at 0.9491 levels. Pair is trading on bullish bias as Switzerland's unemployment rate released with Flat numbers at 3.3%. Near term support is seen at 0.9341 levels and resistance is seen at 0.9500 levels.
AUD/USD is supported below 0.7500 levels and trading at 0.7432 levels. It has made intraday high at 0.7500 levels and low at 0.7416 levels. The Aussie remains in negative territory following the RBA's decision to keep the rate unchanged at 2%. The Australian dollar has declined noticeably against a rising US dollar over the past year, though less so against a basket of currencies. Further depreciation seems both likely and necessary, particularly given the significant declines in key commodity prices," RBA statement said. The Aussie remains further pressured by events surrounding Greece and China, causing global risk aversion which drives risk currencies lower and safe havens higher. Markets sentiment will be driven mainly by this week's economic news from Australia as the labour data report for June is due on Thursday and ongoing Greece story. Initial support is seen at 0.7400 and resistance at 0.7647 levels. Option expiries are at 0.7470 (250M), 0.7500 (206M), 0.7525-30 (500M), 0.7600 (548M).
