Market Brief
EUR/USD is down 1 figure, EUR/CHF reached 1.0360, stock markets trade into negative territory. There is no doubt Greek people voted “NO” at 61.3% in yesterday’s referendum and chose to back Tsipras’ call to reject the proposals of the country’s European creditors. One can see this as a pyrrhic victory, as Greece is still penniless. Jeroen Dijsselbloem, head of eurozone’s finance ministers, said:
“This result is very regrettable for the future of Greece. For recovery of the Greek economy, difficult measures and reforms are inevitable. We will now wait for the initiatives of the Greek authorities”.
Greece’s Prime Minister Tsipras said this victory will give him more strength at the negotiating table; however, he’ll have to move quickly to prevent the collapse of the financial system. Greek banks have been closed for already a week, and are expected to remain so this week. The European Central Bank will have to decide whether to extent emergency loans to the Greek banking sector. However, in the end, EUR/USD almost returned to its pre-referendum level and is now trading around 1.1050, as German Chancellor Angela Merkel and French President François Hollande have called an emergency summit on Tuesday. We are heading for a volatile week!
In Asia, Japan’s Nikkei retreats -2.08%, while in Chinese equity markets, bears pulled Hong Kong’s Hang Seng down by 4% and Shenzhen Composite down by 4.69%. On the other hand, the Shanghai Composite stabilised around 3,709, up 0.61%, as China Security Finance Corp, the institution which managed short selling and margin trading, will receive a capital boost to 76bn “to maintain financial market stability and expand its business."
In Australia, equity markets are trading into negative territory, with the S&P/ASX down -1.14%, while AUD/USD broke to the downside the strong support lying at 0.7533 (low from April 2) and is heading toward the following one at 0.7414 (low from October 2010). Tomorrow, the Reserve Bank of Australia will release its interest rate decision. We expect the RBA to maintain its cash rate at the record-low of 2%. Even though the Bank emphasised many times that the Aussie is overvalued and that further currency depreciation was needed to support the Australian economy, we think that the recent weakness in AUD/USD will be seen as satisfactory, for now, by the RBA.
In Europe, future equity markets are blinking red on the screen amid Greek referendum. Xetra Dax is down -2.09%, Cac 40 -2.43, Euro Stoxx 50 -2.50% and SMI -1.11%. In UK, the Footsie retreats -0.89%, while GBP/USD is challenging the 1.5550 support (Fib. 50% on June rally) as traders are fostering the greenback. The US dollar is broadly higher against G10, as only the Japanese yen is adding gains versus USD.
Today's Calendar Estimates Previous Country / GMT SP May Industrial Output NSA YoY - 2.70% EUR / 07:00 SP May Industrial Output SA YoY 2.80% 1.80% EUR / 07:00 SZ SNB Sight Deposits - - CHF / 07:00 SZ Jun CPI MoM -0.10% 0.20% CHF / 07:15 SZ Jun CPI YoY -1.20% -1.20% CHF / 07:15 SZ Jun CPI EU Harmonized MoM -0.10% 0.00% CHF / 07:15 SZ Jun CPI EU Harmonized YoY -1.00% -0.90% CHF / 07:15 GE Jun Markit Germany Construction PMI - 50.8 EUR / 07:30 UK Jun New Car Registrations YoY - 2.40% GBP / 08:00 FR ECB Member Noyer Presents Bank of France Savings Plan - - EUR / 08:00 GE Jun Markit Germany Retail PMI - 55.8 EUR / 08:10 EC Jun Markit Eurozone Retail PMI - 51.4 EUR / 08:10 FR Jun Markit France Retail PMI - 48.7 EUR / 08:10 IT Jun Markit Italy Retail PMI - 48.3 EUR / 08:10 EC Jul Sentix Investor Confidence 15 17.1 EUR / 08:30 BZ Central Bank Weekly Economists Survey - - BRL / 11:25 US Jun F Markit US Composite PMI - 54.6 USD / 13:45 US Jun F Markit US Services PMI 54.9 54.8 USD / 13:45 CA Jul 3 Bloomberg Nanos Confidence - 56.8 CAD / 14:00 CA Jun Ivey Purchasing Managers Index SA 56 62.3 CAD / 14:00 US Jun ISM Non-Manf. Composite 56.4 55.7 USD / 14:00 US Jun Labor Market Conditions Index Change 2 1.3 USD / 14:00 BZ Jun Vehicle Production Anfavea - 210086 BRL / 14:20 BZ Jun Vehicle Sales Anfavea - 212696 BRL / 14:20 BZ Jun Vehicle Exports Anfavea - 40762 BRL / 14:20 CA 2Q Business Outlook Future Sales 12 4 CAD / 14:30 CA 2Q BoC Senior Loan Officer Survey - 6.7 CAD / 14:30 BZ Jul 5 Trade Balance Weekly - $565M BRL / 18:00 UK Jun Halifax House Prices MoM 0.30% -0.10% GBP / 22:00 UK Jun Halifax House Price 3Mths/Year 8.30% 8.60% GBP / 22:00
Currency Tech
EUR/USD
R 2: 1.1253
R 1: 1.1196
CURRENT: 1.1057
S 1: 1.0955
S 2: 1.0868
GBP/USD
R 2: 1.5930
R 1: 1.5715
CURRENT: 1.5535
S 1: 1.5501
S 2: 1.5369
USD/JPY
R 2: 125.86
R 1: 124.68
CURRENT: 122.57
S 1: 120.64
S 2: 118.33
USD/CHF
R 2: 0.9716
R 1: 0.9588
CURRENT: 0.9433
S 1: 0.9302
S 2: 0.9047