- China recovery pulls yen of 4-week highs. USD/JPY up to 121.53 from 120.41.
- China, regulators police short selling inv focused on 10+ organizations.
- AUD/USD recovers from 6 year low. Up to 0.7492 from 0.7372.
- SSEC closes up 5.8% at 3,709.33 points.
- ECB Draghi- "Really difficult" to save Greece.
- ECB Hanson- ECB ready to implement non-standard measures in case of Grexit.
- Greek Govt Spokesman- Sure creditor deal will be approved by ruling lawmakers.
- SSEC closes up 5.8% at 3,709.33 points.
- UK June RICS housing survey +40 vs previous 34. 37 expected.
- Japan Amari- Policies not aimed at weakening yen.
- Cabinet Secretary Suga- Japan's financial system is healthy.
- Fin Min Aso- Japan has bigger trade relationship with China than Greece, impact will reflect that.
- PM Abe- BOJ steadily working towards achieving 2% target.
- (0730 ET/1130 GMT) US Initial Claims (week July 4) consensus 275k, previous 281k.
- (0730 ET/1130 MGT) US Continued Claims (week June 27) consensus 2.248 mn, previous 2.264 mn.
- N/A Chain Store Sales (June).
Key Events Ahead
- (0700 ET/1100 GMT) BoE MPC policy announcement, no change 0.5% bank rate, 375bln QE eyed.
- (0800 ET/1200 GMT) FRB Chicago's Evans on the economy and monetary policy.
- (0800 ET/1200 MGT) Treasury Sec'y Lew on "America's Fiscal Future"; New York.
- (1015 ET/1415 GMT) Fed Governor Brainard on Regulatory Reform and Implementation; Washington, D.C.
- (1145 ET/1545 GMT) Fed Trade operation 30-year Ginnie Mae (max $925 mn).
- (1230 ET/1630 GMT) FRB Kansas City's George on the economy and monetary policy.
FX Recap
EUR/USD is supported above 1.1000 levels and currently trading at 1.1038 levels. It has made intraday high at 1.1123 and low at 1.1022 levels. The shared European currency erased daily highs and turned into negative territory after the European open. Greek officials are expected to present their latest proposals to creditors today for consideration before a summit on Sunday. Greek officials placed a formal request for a 3-year loan program from the European Stability Mechanism. Previously in Germany, May's trade surplus widened to €22.8 billion vs. €21.5 billion previous. Only US data releases are expected ahead in the session, with Initial Claims and speeches by Fed's N.Kocherlakota and E.George. Initial support is seen around at 1.0914 and resistance at 1.1171 levels. Option expiries are at 1.1000 (1.1BLN), 1.1050 (500M), 1.1100 (1.5BLN), 1.12 (1.1BLN).
USD/JPY is supported above 121.00 levels and posted a high of 121.52 levels. It has made intraday low at 120.45 and currently trading at 121.20 levels. The yen gave up some of this week's gains after Chinese stocks rebounded, the 6 percent gain in Shanghai shares was enough to prompt optimism from investors and a drop of more than 30 percent in China's main market indexes. The dollar rose 0.5 percent at 121.325 yen, after tumbling 1.5 percent on Wednesday to suffer its biggest drop since December. Pair witnessed nearly 200 pips fall on Wednesday after the Japanese currency benefited from its traditional safe-haven status, as China and Greece add to global risk aversion across the market. The major extends its overnight recovery from fresh 2-month lows mainly driven by short-covering rally after suffering heavy losses on Wednesday. The major printed fresh 2-month lows at 120.42 in overnight trades as markets continue to digest FOMC minutes which revealed that Fed appeared less eager to start hiking policy in light of possible lingering Q1 softness and potential weakness from abroad that could spill over to the US. Moving ahead, markets continue to monitor Greece developments as Euro group meetings continue later today. China worries may also have major impact on the pair. Near term resistance is seen at 124.57 and support is seen at 120.63 levels. Option expiries are at 121.00 (1.5BLN), 122.00 (680M).
GBP/USD is supported below $1.5400 levels. It made an intraday high at 1.5419 and low at 1.5355 levels. Pair is currently trading at 1.5368 levels. The Bank of England left policies unchanged in July amid mixed macro data coming in and the ongoing crisis in the euro zone. BOE rate decision did not capture any market movement. Initial support is seen at 1.5256 and resistance is seen around 1.5603 levels. Option expiry is at 1.5370 (250M).
USDCHF is supported around 0.9500 levels and trading at 0.9502 levels and made intraday low at 0.9423 and high at 0.9514 levels. Pair is trading on bullish bias as today is data thin calendar for Switzerland. Market will eye on Greece story and US macro data release due later in a day for the further direction. Near term support is seen at 0.9341 levels and resistance is seen at 0.9500 levels.
AUD/USD is supported above 0.7400 levels and trading at 0.7422 levels. It has made intraday high at 0.7490 levels and low at 0.7391 levels. Focus shifted from Greece and FOMC minutes in Asia as markets cheered upbeat China's inflation as well Australia's employment report, boosting the antipodeans currencies across the board. The Aussie is swinging sharply into positive territory following an upbeat June jobs report. Pair remains under downward pressure from falling Chinese equities and commodity prices. The Australian economy added 7.3k jobs in June, versus the zero figures that was expected. The jobless rate was 6.0%, matching expectations. Initial support is seen at 0.7360 and resistance at 0.7647 levels. Option expiries are at 0.7380 (200M), 0.7500 (434M).
