- Euro vulnerable as Greece deadline approaches, EUR/USD plays in between 1.12995/1.1410 levels.
- Dollar index up on the day but set for 3rd week of losses.
- EUR/GBP down to 0.7126, EUR/CHF to 1.04335 on safety plays.
- Greek Finance minister- No discussion of Greek proposal in EG meeting on Thursday.
- EU Finance ministers reach an agreement on draft law to rein in trading risks at banks.
- Greek CB chief- Confirms the stability of the banking system.
- Russian Deputy PM- Russian could consider giving financial aid to Greece.
- Kremlin spokesman- Needs to hear proposal from Greece before doing anything.
- Russian Deputy Finance minister- Greece is in no financial position to ask for sovereign loan.
- Greek banks saw deposit outflows surge to more than 1bln Euros on Thursday.
- EU leaders' summit called for 17:00 GMT Monday to discuss Greece crisis.
- Euro Zone April current account NSA 20.4bln vs previous 24.4bln revised. SA 22.3bln vs previous 18.0bln revised.
- Euro Zone April Net investment flow 37.5bln vs previous -39.6bln revised.
- UK May PSNB 9.350bln vs previous 5.459bln revised. 10.050bln expected.
- UK May PSNCR 12.383bln vs previous -2.731bln revised.
- Greek regulators battling hedge funds behind-the-scenes.
- No major U.S economic indicator releases scheduled.
- (0830 ET/1230 GMT) Canada May CPI forecast +0.8% y/y. Core CPI f/c +2.1% y/y.
Key Events Ahead
- (0945 ET/1345 GMT) Fed Trade operation 30-year Fannie Mae / Freddie Mac (max $2.000 bn).
- (1140 ET/1540 GMT) FRB San Francisco's Williams on monetary policy at NBER East Asia seminar.
- (1215 ET/1615 MGT) FRB Cleveland's Mester at FRB Cleveland/Philadelphia Policy Summit; Pittsburgh.
FX Recap
EUR/USD is supported around 1.1300 levels and currently trading at 1.1310 levels. It has made intraday high at 1.1399 and low at 1.1298 levels. However, the pair remains under pressured mainly on the back of Greece stand-off once again at Euro group meeting where the talks were concluded with no deal reached between Greece and its international creditors. While EU leaders will meet on Monday for a special session in an attempt to resolve the Greek crisis after the Euro group meeting on Thursday failed to break a current deadlock between Greece and its lenders. Moreover, a strong rebound seen in the US dollar against its major competitors also exerted additional pressure on the shared currency, keeping EUR/USD highly undermined. Initial support is seen around 1.1297 and resistance is seen around 1.1437 levels. Option expiries are at 1.1200 (2.8BLN), 1.1250 (415M), 1.1300 (490M), 1.1415 (406M).
USD/JPY is supported around 123.00 levels and posted a high of 123.20 levels. It has made intraday low at 122.81 and currently trading at 123.12 levels. Today BOJ decided not to make any changes to its current policy settings, keeping interest rates at around zero, and continuing to expand the monetary base at a rate of ¥80 trillion per year. According to the bank's forecasts, inflation is set to reach the 2% target in the first half of fiscal 2016. Pair is trading range bound after most expected BOJ interest rate decision. Near term resistance is seen at 124.57 and support is seen at 122.10 levels. Option expiries are at 122.00 (3.5BLN), 123.00 (1.6BLN), 124.00 (827M).
GBP/USD is supported below $1.5900 levels. It made an intraday high at 1.5895 and low at 1.5841 levels. Pair is currently trading at 1.5850 levels. Sterling hit a seven-year high against a trade-weighted basket of currencies on Friday, bolstered by expectations that British interest rates could start to rise earlier than previously thought on the back of some robust data. It was softer against the dollar at $1.5865, having hit a seven-month high of $1.5930 on Thursday. But it was higher against the euro, with the single currency down 0.4 percent at 71.32 pence, its lowest level for three weeks. Data on Friday showed strong growth in income tax receipts pushed British government borrowing to its lowest May reading in eight years. Britain's headline public borrowing fell to 10.129 billion pounds in May from 12.350 billion a year earlier. The Pound holds to its recent gains against the greenback, with the GBP/USD pair hovering around the 1.5850 region, despite an increasing demand for dollars this Friday. Early data showed that Britain has its smallest budget deficit since May 2007 according to May figures, yet another sign of economic strength. Increasing fears of a Grexit however, are weighing on the Pound and preventing it from advancing against its rivals. Initial support is seen at 1.5744 and resistance is seen around 1.5939 levels. Option expiries are at 1.5500 (808M), 1.5649-50 (1.1BLN).
USD/CHF is supported above 0.9200 levels and trading at 0.9225 levels and made intraday low at 0.9201 and high at 0.9247 levels. Market is trading flat after SNB maintained its policy of negative interest rates and penalties for holding Swiss francs in cash. Today was data free session for Switzerland. Near term support is seen at 0.9113 levels and resistance is seen at 0.9289 levels.
AUD/USD is supported below 0.7800 levels and trading at 0.7751 levels. It has made intraday high at 0.7813 levels and low at 0.7745 levels. A broad based sell-off in the USD pushed the commodities higher. Iron ore slides around +6% during this week. The pair was heavily sold-off largely driven by upbeat sentiment on the US dollar amid a data-light trading session. While Trading is expected to be very light today due to no data releases on the domestic front, while foreign economies also offer very few weighty fundamentals. Initial support is seen at 0.7568 and resistance at 0.7838 levels. Option expiries are at 0.7600 (737M), 0.7700 (332M), 0.7800 (771M), 0.7850 (705M).
