Euro is mildly lower in Asian session as traders were disappointed by the lack of conclusion on a Greece bailout after the Eurozone Crisis summit on Sunday. Instead, Greece was requested to pass the legislations on reforms within three days before negotiations of the EUR 86b third bailout could be resumed in detail. Also, it's reported that Germany insisted that Greek state assets of EUR 50b held in a trust fund in Luxembourg should be sold off with proceeds going directly to repay debts. And, IMF must be involved in any third bailout despite resistance from Greece. The Eurogroup finance ministers would then meet again on Friday to launch the negotiations formally. There are a few options under considerations to give Greece bridging funds once the laws are passed. While the common currency is mildly lower, the loss is limited so far. Euro is also supported by rumors that ECB would delay a EUR 3.5b repayment due on July 20.
Sentiments were also aided by trade data from China. Trade surplus narrowed to USD 46.61b in June versus expectation of USD 56.35b. Exports rose 2.8% yoy to USD 192b, reversing the -2.5% decline in May. On the other hand, imports dropped -6.1% yoy to USD 145.5b, recovering from -17.6% yoy fall in May. Economists noted that the set of data showed tentative improvements in June with recovering exports and lower contraction in imports. Also, the strong 12.0% yoy rise in exports to US showed that US recovery is helping to stabilize trade in China. The rebound in China stocks continues today with the Shanghai A share index up more than 2% at the time of writing. That led Nikkei higher by over 300 pts, back above 20000 handle.
The economic calendar is light today and focus will be on the events in the week ahead. Development in Greece will continue to catch most attention. Meanwhile, there are a number of central bank activities. That includes BoJ, BoC and ECB policy decision. Fed chair Janet Yellen will testify before Congress and Fed will release Beige Book report. Here are some highlights for the week.
- Tuesday: Australia NAB business confidence; Swiss PPI; UK CPI, PPI; German ZEW, Eurozone industrial production; US retail sales
- Wednesday: China GDP, industrial production; BoJ; UK employment; Swiss ZEW; US PPI, Empire state manufacturing, industrial production, Yell testimony, Beige Book; BoC rate decision;
- Thursday: New Zealand CPI; Swiss retail sales; Eurozone CPI final; ECB rate decision; UK jobless claims, Philly Fed survey, NAHB index
- Friday: Canada CPI; US CPI, housing starts, U of Michigan sentiment