- EUR/USD plays a tight 1.1125-1.1172 range, brief boost from Greek vote.
- PBOC sets USD/CNY mid-point at 6.3975, last close/today's open 6.3990.
- Greek governor secures enough votes to pass bailout agreement in parliament.
- Greek PM to seek confidence vote after August 20 when ECB debt repay falls.
- Greek conservatives will not vote in favour of govt in a confidence vote.
- IMF presses Europe to provide debt relief for Greece.
- Germany Flash Q2 GDP 1.6% y/y vs 1.1% previous, 1.5% expected.
- UK June construction output volume +2.6% y/y vs 1.3% previous, 3.3% expected.
- Euro zone Flash Q2 GDP 1.2% y/y vs 1.0% previous, 1.3% expected.
- Euro zone Flash Q2 GDP 0.3% q/q vs 0.4% previous, 0.4% expected.
- Euro zone Final July inflation -0.6% q/q, +0.9% y/y vs 0.0/08% previous, -0.7/1.0% expected.
- Greece to get E6 bln in bridge loans if no agreement at Euro Group.
- German Deputy Finance Minister Spahn - Greece must stick to timetable to get funds.
- Panic in USD/MYR market, high 4.1180, MYR weakest since Sep '98, fix at 4.1505 levels.
- (0830 ET/1230 GMT) US July PPI final demand, +0.1% m/m, -0.9% y/y eyed; last +0.4%, -0.7%.
- (0830 ET/1230 GMT) US July ex-food/energy, +0.1% m/m, +0.5% y/y eyed; last +0.3%, +0.8%.
- (0915 ET/1315 GMT) US July industrial output, +0.3% m/m eyed; last +0.2%.
- (0915 ET/1315 GMT) US July capacity utilization, 78.0% eyed; last 77.8%.
- (1000 ET/1400 GMT) US August UOM sentiment index prelim, 93.5 eyed; last 93.1.
Key Events Ahead
- (1145 ET/1545 GMT) Fed Trade ops 30-year F.Mae/Fr.Mac max $2.000bln.
FX Recap
USD: The dollar steadied on Friday after PBoC seems to have halted guiding the Yuan lower, easing concerns little bit that a weaker Yuan could derail plans by the U.S. Fed to lift interest rates. The dollar traded at 124.35 yen, flat from late U.S. levels and above this week's low of 124.21 yen. Against a basket of currencies, the dollar was steady at 96.387.
EUR/USD is supported above 1.1100 levels and currently trading at 1.1154 levels. It has made intraday high at 1.1171 and low at 1.1124 levels. After the fastest expansion in four years during the first quarter, GDP eased somewhat in the second quarter, numbers out on Friday showed. Second quarter GDP data for the euro zone came in lower than expected as France and Germany - Europe's top economies - posted non-stellar data. Joint GDP data of all 19 members of the euro area saw a 0.3% expansion quarter-on-quarter during the second three months of 2015. Analysts had expected 0.4% in the second quarter, while the previous quarter experienced a four-year high, when the euro zone economy rose 0.4%, the highest since the first quarter of 2011 which saw a 0.8% increase. Initial support is seen around at 1.0789 and resistance at 1.1195 levels.
USD/JPY is supported above 124.00 levels and posted a high of 124.53 levels. It has made intraday low at 124.16 and currently trading at 124.22 levels. The small appreciation of the Yuan, after three-consecutive days of devaluation, means the PBoC is serious about bringing the onshore Yuan (CNY) more in line with the offshore Yuan (CNH), rather than simply trying to devalue the currency in a bid to support the export sector, which should help restore risk appetite. Pair is trading flat ahead of US macroeconomic data release. Initial resistance is seen at 125.68 and support is seen at 120.63 levels.
GBP/USD is supported above $1.5600 levels. It made an intraday high at 1.5627 and low at 1.5589 levels. Pair is currently trading at 1.5617 levels. The British pound keeps its range play intact, although edges slightly higher in the mid-European session. Next of relevance in the pair will come from the US docket, where Producer Prices, the Reuters/Michigan index and Industrial Production area all due later. Initial support is seen at 1.5413 and resistance is seen around 1.5734 levels.
NZDUSD is supported below 0.6600 levels and trading at 0.6552 levels and made intraday low at 0.6514 and high at 0.6572 levels. The New Zealand dollar experienced bearish pressure on Friday after the retail sales report, which proved to be negative. Moreover, the US dollar stayed firm, pushing the so-called kiwi close to its lowest level since 2009. Statistics New Zealand informed on Friday that consumers' appetite in the second quarter increased only marginally by a seasonally-adjusted 0.1%, adding to the disappointment from the second quarter. Forecasts had pointed to a 0.5% increase, while the previous quarter saw a 2.3% rise. Core retail sales, excluding the fuel and motor industry, also rose by a poor 0.1% in the second quarter, confirming the poor outcome in the quarter. Initial support is seen at 0.6465 and resistance at 0.6789 levels.
AUD/USD is supported above 0.7300 levels and trading at 0.7384 levels. It has made intraday high at 0.7396 levels and low at 0.7355 levels. Dovish comments from Reserve Bank of Australia (RBA) Assistant Governor Christopher Kent saw a 0.3% gain in the Australian dollar against the US dollar all but wiped out on Friday. Kent said the central bank was "keeping an open mind" with regards to interest rates, following a speech on employment at the Economic Society of Australia's 2015 Business Lunch on Friday. Looking ahead, the pair will track US dollar moves amid lack of fresh trigger in the European session as focus now shifts back to a host of US data to be released later tonight. Initial support is seen at 0.7225 and resistance at 0.7647 levels.
USD/ZAR is currently trading around 12.8221 levels. It made intraday high at 12.8876 and low at 12.7762 levels. South Africa's rand hit fresh 14-year lows against the dollar on Friday on worries about the local economy and prospects of imminent U.S. policy tightening. The rand plunged to a session low of 12.8895 against the dollar, the weakest it has been since Dec. 2001. By 0705 GMT it was at 12.8500, down 0.34 percent from Thursday's close and on track for its biggest weekly loss since the week ended July 24. Initial resistance is seen around 12.8876 levels and support at 12.7395 levels.
Equity Recap
European stocks regained some of the week's losses after the Greek parliament approved a third multi-billion euro bailout deal.
The FTSEuroFirst index of leading 300 European shares was up 0.5 percent at 1,538 points, as was the Euro Stoxx 50 index of leading euro zone shares at 3,349 points. Germany's DAX and France's CAC40 were both up 0.6 percent. Britain's FTSE100 was up 0.4 percent.
MSCI's broadest index of Asia-Pacific shares outside Japan slipped 0.1 percent, ending the week down 2.7 percent, its biggest weekly loss since early July. Japan's Nikkei stock index fell 0.36 percent, and was down about 1 percent for the week. Shanghai Composite Index closed up 0.3 pct at 3,965.33 points, while China's CSI300 Index ended flat at 4,073.54 points.
Commodities Recap
U.S. crude oil fell to its lowest in almost six-and-a-half years on Friday as huge stockpiles and refinery shutdowns heightened concerns about global oversupply and slowing economies in Asia. U.S. crude was down 24 cents at $41.99 a barrel by 1045 GMT. The contract earlier hit an intraday low of $41.35, its lowest since March 4, 2009. Brent crude traded at $49.12, down 10 cents and some way off its 2015-low of $45.19 reached in January.
Gold steadied away from a 3-week high on Friday as China calmed jittery global markets, with upbeat U.S. retail sales refreshing expectations for a near-term increase in U.S. interest rates. Spot gold was flat at $1,115.20 an ounce by 0628 GMT, after peaking at $1,126.31 on Thursday, its highest since July 20. U.S. gold for December delivery was similarly unchanged at $1,115.20 an ounce.
Treasuries Recap
The yield on 10-year U.S. Treasury notes was steady on the day - and the week - at 2.18 percent, having fallen to a near four-month low of 2.04 percent on Wednesday.
JGB prices ended the day marginally mixed in very thin trading. JGB yields moved in a very narrow range of 1bp or less across the curve today. Many market participants were off today on summer vacation in the middle of Japan's traditional Obon holidays. Yields on the new 5-yr JGBs moved in a narrow range between 0.08% and 0.085%, vs 0.089% for yesterday's average accepted yield. Meanwhile, those on the current 20-yr JGBs also fluctuated in a narrow range between 1.155% and 1.16% before ending at 1.155%, unchanged from yesterday's afternoon close.
German 10-year yields - Europe's top-rated benchmark - were flat at 0.63 percent, but are set to finish the week around 2 bps lower.
Yields on Italian and Spanish bonds - the biggest markets in the euro zone's southern periphery - shed 1 basis point each, to 1.79 and 1.95 percent respectively, at the end of a tumultuous week driven by Chinese growth concerns neared. Greek equivalents fell 6 basis points to 10.07 percent.
UK Gilts opened 14 ticks lower than the settlement of 117.81 as eurozone fixed income markets came under pressure from headlines that the Greek parliament had ratified the bailout vote. Not much in the way of drama though so far with 10-year cash yields sitting in the middle of the recent range.
New Zealand government bond yields were flat. Australian government bond futures were a shade lower as the yuan scare faded. The 3-year bond contract eased 3 ticks to 98.040, while the 10-year lost 3 ticks to 97.2000.
