Market Brief
European equities were upbeat yesterday after Greek parliament approved an unpopular package of austerity measures, which will allow Greece to access €86bn of bailout funds. Mario Draghi announced that the European Central Bank has decided to increase emergency funds by €900mn while Eurozone finance ministers agreed to provide Greece with a bridge loan of €7bn. The latter will provide Greece with sufficient fund to pay the €2bn of arrears due to the IMF as well as the €3.5bn due to the ECB on Monday. The Bundestag will vote on Greek bailout proposal today at GMT 8am.
With market participants shifting their attention away from the Greek situations, we anticipate risk appetite to rise further as the Greek situation evolves in a positive direction. EUR/USD stabilised in Tokyo after having dropped almost 3% since Monday. On the downside, a strong support can be found at 1.0819 while on the upside, the pair will need renewed buying interest to test the 1.12 threshold. European equity futures are trading in positive territory with the FTSE 250 up 0.11%, XETRA DAX up 0.26%, CAC 40 up 0.36%, SMI 0.31% while Euro Stoxx 50 gains 0.38%.
In UK, the pound sterling is gaining upside momentum, thanks to BoE Governor Mark Carney recurrent hawkish comments over the last few days. Carney said that the time for an increase in interest rates is getting closer. “The decision as to when to start such a process of adjustment will likely come into sharper relief around the turn of this year”, Carney said. GBP/USD rose 1.4% this week and is currently turning the 1.5640 resistance (Fib 38.2% on June rally) into a support. However, our favourite currency pair to play the GBP strength is the EUR/GBP. Since Monday, the single currency loses more than 2.5% against the pound, reaching 7-year low at 0.6944.
In New Zealand, jobs advertisement falls 0.6% in June compared to previous month while previous reading was revised lower to -0.6% from 0.1% first estimate. The soft economic growth is hitting hard the job market and we expect employment to remain under pressure this year. NZD/USD is stabilizing around 0.6533.
On the equity front, Asian regional equity markets are trading higher with Japan’s Nikkei 225 up 0.25%, Hong Kong’s Hang Seng up 1.29%, Shanghai Composite up 3.81%, Shenzhen Composite up 5.32% while Australian shares shares adds 0.01%.
Today traders will be watching June CPI figures from Canada; June CPI and University of Michigan preliminary sentiment index for July.
Today's CalendarEstimatesPreviousCountry / GMT EC ECB Survey of Professional Forecasters - - EUR / 08:00 BZ Jul 15 FIPE CPI - Weekly 0.45% 0.43% BRL / 08:00 EC May Construction Output MoM - 0.30% EUR / 09:00 EC May Construction Output YoY - 0.00% EUR / 09:00 BZ May Economic Activity MoM 0.20% -0.84% BRL / 11:30 BZ May Economic Activity YoY -4.00% -3.13% BRL / 11:30 IT Bank of Italy Releases the Quarterly Economic Bulletin - - EUR / 12:00 CA Jun CPI NSA MoM 0.20% 0.60% CAD / 12:30 US Jun Housing Starts 1106K 1036K USD / 12:30 CA Jun CPI YoY 1.00% 0.90% CAD / 12:30 US Jun Housing Starts MoM 6.70% -11.10% USD / 12:30 CA Jun Consumer Price Index 127.1 126.9 CAD / 12:30 US Jun Building Permits 1150K 1275K USD / 12:30 CA Jun CPI Core MoM -0.10% 0.40% CAD / 12:30 US Jun Building Permits MoM -8.00% 11.80% USD / 12:30 CA Jun CPI Core YoY 2.20% 2.20% CAD / 12:30 US Jun CPI MoM 0.30% 0.40% USD / 12:30 CA Jun CPI SA MoM - 0.40% CAD / 12:30 US Jun CPI Ex Food and Energy MoM 0.20% 0.10% USD / 12:30 CA Jun CPI Core SA MoM - 0.20% CAD / 12:30 US Jun CPI YoY 0.10% 0.00% USD / 12:30 US Jun CPI Ex Food and Energy YoY 1.80% 1.70% USD / 12:30 US Jun CPI Index NSA 238.632 237.805 USD / 12:30 US Jun CPI Core Index SA 242.098 241.76 USD / 12:30 US Jun Real Avg Weekly Earnings YoY - 2.30% USD / 12:30 BZ Jul CNI Industrial Confidence - 38.9 BRL / 14:00 US Jul P U. of Mich. Sentiment 96 96.1 USD / 14:00 US Jul P U. of Mich. Current Conditions - 108.9 USD / 14:00 US Jul P U. of Mich. Expectations - 87.8 USD / 14:00 US Jul P U. of Mich. 1 Yr Inflation - 2.70% USD / 14:00 US Jul P U. of Mich. 5-10 Yr Inflation - 2.60% USD / 14:00 BZ Jun Formal Job Creation Total -99096 -115599 BRL / 19:00 CH Jun Foreign Direct Investment YoY CNY 0.50% 7.80% CNY / 22:00 CH Jun New Yuan Loans CNY 1050.0B 900.8B CNY / 22:00
Currency Tech
EUR/USD
R 2: 1.1436
R 1: 1.1278
CURRENT: 1.0898
S 1: 1.0819
S 2: 1.0660
GBP/USD
R 2: 1.5930
R 1: 1.5803
CURRENT: 1.5663
S 1: 1.5330
S 2: 1.5171
USD/JPY
R 2: 125.86
R 1: 124.45
CURRENT: 123.94
S 1: 120.41
S 2: 118.89
USD/CHF
R 2: 1.0129
R 1: 0.9719
CURRENT: 0.9564
S 1: 0.9151
S 2: 0.9072