- Signs of Greek progress lift Euro. EUR/USD plays from 1.1029 to 1.1181 levels.
- Yen hit as risk appetite grows. USD/JPY up to 122.38 from 121.27.
- Extended bounce in China shares also lifts risk appetite.
- Lagarde/Juncker/Draghi/Dijsselbloen to confer on Greece at 11:00GMT.
- Italy's Renzi says Greek deal may come before EU leaders meet Sunday.
- EU leaders unlikely to overturn clear Euro group verdict on Greece.
- German finance minister- A debt haircut is not legally possible in the currency union.
- UK May Construction output volume -1.3% m/m, +1.3% y/y vs previous -0.5%/+1.8% revised. 0.2%/3.0% expected.
- UK May Good trade balance. Non-EY -1.570bln vs previous -2.399bln. -2.55bln expected.
- UK May Good trade balance. GBP -8.000bln vs previous -9.387bln. -9.70bln expected.
- Norway June Core CPI +3.2% y/y.
- (1000 ET/1400 GMT) Wholesale Inventories (May) (consensus +0.3% m/m, previous +0.4% m/m).
- (1000 ET/1400 GMT) Wholesale Sales (May) (consensus +0.6% m/m, previous +1.6% m/m).
Key Events Ahead
- (1135 ET/1535 GMT) FRB Boston's Rosengren (non-voter, dove) at economic summit; Victor, ID.
- (1145 ET/1545 GMT) Fed Trade operation 15-year Fannie Mae / Freddie Mac (max $600 mn).
- (1230 ET/1630 GMT) Fed Chair Yellen on the economic outlook; Cleveland, Ohio.
- (1700 ET/2100 GMT) FRB Boston's Rosengren (non-voter, dove) in Reuters interview.
FX Recap
EUR/USD is supported above 1.1100 levels and currently trading at 1.1175 levels. It has made intraday high at 1.1183 and low at 1.1028 levels. The euro rose more than 1 percent against the yen, on hopes that Greece was making some progress in its efforts to secure more funding and avoid Grexit. The common currency climbed 1.3 percent versus the yen to 135.60 and added 0.7 percent against the dollar to trade at $1.1115. It also rose 0.5 percent against the Swiss franc and the British pound. Risk was observed after the Alexis Tsipras government presented an officially signed copy of a plan of reforms, spending cuts and tax reforms worth approximately €13 billion to its international lenders a couple of hours before the midnight deadline. The new proposal, prepared with the help of French advisers and experts, includes changes to VAT rates, concessions on pensions and rising the retirement age to 67 by support is seen around at 1.0914 and resistance at 1.1243 levels. Option expiries are at 1.1000 (921M), 1.1035-40 (1.1BLN), 1.1050 (300M).
USD/JPY is supported above 122.00 levels and posted a high of 122.38 levels. It has made intraday low at 121.26 and currently trading at 122.35 levels. Despite higher than expected US weekly initial claims numbers, USD-JPY pushed higher on the back of improved risk appetite on Thursday and the pair may remain supported in the interim. Today Japan released consumer confidence data with Flat numbers at 41.7 vs 41.4 previous numbers. Near term resistance is seen at 124.57 and support is seen at 120.63 levels. Option expiries are at 121.35-40 (900M), 122.00 (515M), 123.00 (1.5BLN).
GBP/USD is supported above $1.5500 levels. It made an intraday high at 1.5522 and low at 1.5363 levels. Pair is currently trading at 1.5520 levels. The pair extends its upbeat momentum as fresh Greek hopes spurred generalized risk-on moods, with investors rushing to riskier assets. The major rallies this session tracking heavy gains seen in the European currency as markets seem to have bought the latest chatter on a potential Greek deal to be struck today. Moreover, traders react positively to the stronger than expected UK trade balance data, boosting the pound further. The UK trade deficit for May shrank from -£1,834 million (downwardly revised from -£1,202 million) to £-393 million, while markets had expected the deficit to widen to -£2,150 million. Initial support is seen at 1.5256 and resistance is seen around 1.5603 levels. Option expiry is at 1.5690 (253M).
USDCHF is supported below 0.9400 levels and trading at 0.9360 levels and made intraday low at 0.9357 and high at 0.9489 levels has broken short term trend line support 0.9390 and this confirms short term weakness, a decline till 0.9330/0.9290 cannot be ruled out. It has made a temporary top around 0.9512 and is retreating form that level. Overall trend reversal can happen only above 0.9525. On the higher side short term trend reversal is seen only above 0.9420. Any break above would extend gains till 0.9480/0.9515. Near term support is seen at 0.9341 levels and resistance is seen at 0.9500 levels.
AUD/USD is supported below 0.7500 levels and trading at 0.7491 levels. It has made intraday high at 0.7494 levels and low at 0.7441 levels. Today Australia Investment Lending for Homes declined to -3.2% in May from previous 2.6% while Australia Home Loans came in below expectations (-3.5%) in May: Actual (-6.1%). Initial support is seen at 0.7360 and resistance at 0.7647 levels. Option expiries are at 0.7450 (344M), 0.7500 (1.1BLN).
