Talking Points:
• Progress towards a third Greek rescue means euro volatility has settled, but it is also free to trade
• In the week ahead, a lull in event risk finds the RBNZ rate decision top event risk with a heavy bias
• Risk trends will be a dominant theme after much of the risk premium has been squeezed in the equity bounce
The euro is free to move with Greece's clouds clearing, the dollar awaits the next FOMC decision, risk trends are stretched and the RBNZ is top event risk. Conditions have changed substantially for the FX and financial markets from a week ago, but there is still plenty of opportunity to be found going forward. Last week, the focus was on a Greek crisis, Chinese market stability and rate speculation with Fed Chair Janet Yellen testifying. All three themes have tempered, but that simply means the is free to slide and the Greenback refocuses on key event risk due in the final weak of July. Meanwhile, another set of high profile fundamental weight will take over in the form of global equities conspicuously flagging as record highs come into view (a precarious 'risk appetite' signal) and a heavily-speculated rate cut for New Zealand's central bank sets up strong potential for the kiwi. We look at the major currents in the markets ahead as well as those areas were steady conditions offer different trade opportunities in this Weekend Trading Video.
