- Euro off Greece-driven lows after SNB intervention.
- SNB Jordan- SNB has intervened in currency market.
- EUR/CHF down to 1.0315, recovered to 1.040, easier into NY.
- EUR/USD down to 1.0955, Recovered to 1.1125 before lower again.
- EUR/GBP makes new low under 0.7000 at 0.68895, first time since 2007.
- Bank stocks smash European bourses to significant lows, DAX of 5.0% vs Friday high.
- ECB Nowotny- ELA will be discussed at ECB governing council meeting on Wednesday.
- Spain Econ min- I'm convinced that Greece will continue to be part of the euro.
- France Fin min- Exit of Greece from EZ is still a possibility.
- Germany Ottinger- If Greece doesn't stay in the EZ it won't be end of the world.
- Moscovici urges Greek PM to call for 'Yes' vote in referendum.
- BOE May Consumer credit +1.001bln vs previous +1.176bln revised 1.100bln expected.
- UK May Mortgage lending +2.098bln vs previous 1.695bln revised. 2.050 expected.
- Euro Zone June Business climate 0.14 vs previous 0.28. 0.27 expected.
- Euro Zone June Consumer confidence final -5.6 vs previous -5.6. -5.6 expected.
- Japan Aso- Doesn't see more falls in JP stocks, yen gains on Greece turmoil.
- (1000 ET/1400 GMT) US Pending Home Sales Index (May) consensus 113.7, previous 112.4.
- (1030 ET/1430 GMT) US Dallas Fed Texas Manufacturing Outlook Survey (Jun) previous -20.8.
Key Events Ahead
- (1145 ET/1545 GMT) Fed Trade operation 30-yr Ginnie Mae (max $925 mn).
- (1430 ET/1830 GMT) Fed Trade operation 15-yr Fannie Mae/Freddie Mac (max $600 mn).
FX Recap
EUR/USD is supported around 1.1100 levels and currently trading at 1.1095 levels. It has made intraday high at 1.1123 and low at 1.0952 levels. The investors await more definite news on Greece after a number of officials across the Euro zone calmed market nerves by stating a possibility of the Greece deal before the July 5 referendum in Greece. The verbal assurances helped the pair recover from the low of 1.09533 and clock a high at 1.1123. As the Greek negotiations with the Euro group failed to bring any positive results, the Greek government imposed capital controls including a €60 per day maximum ATM machine withdrawal to limit the chaos and panic, while banks and the stock market in Athens will be closed for the whole week. Initial support is seen around 1.0914 and resistance is seen around 1.1218 levels. Option expiries are at 1.0945-50 (420M), 1.1100 (666M).
USD/JPY is supported below 123.00 levels and posted a high of 123.18 levels. It has made intraday low at 122.09 and currently trading at 122.84 levels. The Japanese yen was one of the strongest performing currencies at the start of the new week, with investors bidding up the safe-haven currency as fears that Greece may leave the EU eroded investor sentiment Monday, sending stocks sharply lower with the euro. Greece will hold a referendum on July 5 on whether or not to meet its creditors' austerity demands, but until then the debt-ridden nation has been advised to keep banks closed to avoid a bank run, following large withdrawals on Friday and over the weekend. A vote against accepting austerity measures would likely lead to an exit from the European Union, causing financial instability across Europe and possibly beyond. There was also some positive data out of Japan on Monday, with retail sales growing 3% year-on-year last month, the second-consecutive increase in sales. However, this positive news was offset by preliminary industrial production, which reportedly fell 2.2% over the same period. Near term resistance is seen at 124.57 and support is seen at 122.10 levels. Option expiries are at 122.00 (2BLN), 122.45-50 (370M), 123.25 (255M), 123.50 (280M).
GBP/USD is supported around $1.5700 levels. It made an intraday high at 1.5742 and low at 1.5661 levels. Pair is currently trading at 1.5691 levels. Sterling hit a 7 1/2-year high against the euro on Monday as people looked for safe havens after Greece's debt crisis worsened and Athens imposed capital controls. The euro fell to 69.885 pence in early Asian trade, its lowest since late 2008, before recovering to trade at 70.60 pence, still down 0.4 percent. Sterling was down 0.2 percent at $1.5704. The USD bulls took charge earlier this session and pushed GBP/USD lower as the greenback strengthened on tumbling EUR/USD on Greek concerns. Later in the day, the pair will track US dollar moves amid lack of UK fundamentals while US pending home sales and fresh Greek updates will be closely watched. Initial support is seen at 1.5624 and resistance is seen around 1.5835 levels. Option expiry is at 1.5800 (183M).
USD/CHF is supported below 0.9400 levels and trading at 0.9338 levels and made intraday low at 0.9335 and high at 0.9426 levels. The Swiss National Bank Chief Jordan confirmed that the bank intervened in the FX markets on Monday as the Swiss Franc faced the risk of appreciation due to safe haven appeal. He said the bank is prepared for Grexit, while adding that the default would be extremely difficult situation for the Greek banks. The intervention today was mainly to stem the rise in the CHF due to the Greece led risk aversion across the globe. Near term support is seen at 0.9279 levels and resistance is seen at 0.9428 levels.
AUD/USD is supported below 0.7700 levels and trading at 0.7656 levels. It has made intraday high at 0.7692 levels and low at 0.7585 levels. The pair erased early losses and climbed higher as traders continued to cheer Saturday's Chinese rate cut announcement. China is New Zealand's and Australia's largest export market. Moreover, higher gold prices on increased safe-haven bids on Greece crisis are also supports the resource-linked Aussie. However, the upside remains capped on underlying Greek concerns continues to dampen investors' sentiments, weighing on risk-sensitive currencies lower. Initial support is seen at 0.7568 and resistance at 0.7838 levels. Option expiry is at 0.7670-75 (240M).
