[B]Greece Buckling:[/B]
In it’s race to avoid a full scale bankruptcy, Greece has this morning submitted a package of proposed reforms to its Eurozone creditors in hope that a last minute deal can be struck heading into the weekend’s deadline.
If accepted by the Eurozone, the measures would have to be voted through parliament next week, meaning that Greece would require yet more emergency funding to keep the banking system hanging on by a thread. Bad news for Greek people who are even unable to access the 60 Euro per day limit at most ATM machines, simply because there is no cash circulating through the system.
Read the full Asian Session Morning on the Vantage FX News Centre here.
#ThisIsACoup:
It’s worth taking a look at the latest trending hashtag on Twitter. I’ll leave you to explore the #ThisIsACoup theme yourself, but it is a prime example of the idealistic risks that arise from oppressing a nation or group the way that capital controls and austerity does.
Nobody wants another North Korea in the middle of Europe.
Read the full Asian Session Morning on the Vantage FX News Centre here.
[B]Humiliation Complete:[/B]
So this is it. Greece has now surrendered much of it’s sovereignty to a Europe led by Germany in return for an €86 billion bailout program which will keep the embattled nation in the Eurozone.
Questions are being asked about the democratic legitimacy of the decision after a referendum resoundingly rejected a more compromising austerity package less than a week ago with 61% of the vote. A vote that proved to only delay and let the economic situation in Greece deteriorate further, giving all the negotiating power to Europe.
Read the full Asian Session Morning on the Vantage FX News Centre here.
[B]Pluto and Retail Sales:[/B]
Not exactly markets related but quite a big deal nonetheless with NASA confirming overnight that it’s unmanned New Horizons spacecraft successfully passed by Pluto and delivered some amazing higher resolution photos of the distant planet back to Earth. After a 9 year journey of over 5 million kilometers, to finally see the surface of a new world is pretty amazing!
Something definitely (probably?) unrelated to the planets, was the miss in US retail sales with the -0.3% coming in below the +0.3% reading expected.
Read the full Asian Session Morning on the Vantage FX News Centre here.
[B]Fed on Track:[/B]
Federal Reserve Chair Janet Yellen delivered her semi-annual testimony to Congress overnight. Around being grilled by Republicans who are concerned about the transparency of the central bank, she did manage to deliver an upbeat message on the direction of the US economy and indicated that the Fed was still on track to raise rates this year.
“If the economy evolves as we expect, economic conditions likely would make it appropriate at some point this year to raise the federal funds rate target.”
Read the full Asian Session Morning on the Vantage FX News Centre here.
The most recent agreement between world powers and Iran limits Iranian nuclear activity and lifts the crippling international economic sanctions imposed on them. This deal has a potentially massive impact on the price of oil with sanctions reportedly taking over 1 million barrels of oil supply out of the market.
In an attempt to gain a foothold back in the oil export market, Iran could undercut prices in an attempt to generate cash flow. The 700,000 barrels a day that Iran adds to the market could now have a huge supply side impact on the market.
Read the full Technical Analysis Post on the Vantage FX News Centre here.
[B]Unemployment Ticks Down:[/B]
Filings for US unemployment benefits declined overnight, potentially giving the Fed yet more ammunition to begin hiking interest rates as early as September. Jobless claims came in at 281K v the 284K expected and while not a huge beat, it’s definitely good news for Dollar Bulls.
Read the full Asian Session Morning on the Vantage FX News Centre here.
[B]Greek Banks Lift the Shutters:[/B]
After being shuttered up for three long weeks, Greek banks are today ready to open their doors again in order to restore some normality to the lives of every day Greek people.
With withdrawal limits still in place and only a slight relaxation of capital controls, rather than the previous €60 per day limit, individuals will now be able to withdraw a new weekly allowance of €420 in a single transaction. Queues at struggling regional bank branches are not expected to go away any time soon but the increased limit will not relieve any pressure on the struggling lower class. Restrictions on sending money abroad will also still remain in place.
Read the full Asian Session Morning on the Vantage FX News Centre here.
“Where is my security, where is my security?”
[B]Gold Dawdles[/B]
After major weekly support was broken in Gold during yesterday’s Asian Session, Bloomberg Business today had an interesting graph comparing the performance of different asset classes, highlighting just how terrible commodities have been performing.
Read the full Asian Session Morning on the Vantage FX News Centre here.
[B]USD Blow Off:[/B]
After yesterday asking the question ‘are new highs on the cards for the USDX?’, The US Dollar blew-off its top overnight. The move was mostly triggered simply by profit takers using the lack of major data and event drivers using the quiet session to lock in some profits. The fact that a Grexit gets pushed further onto the back-burners and Chinese government measures have at least stemmed the bleeding in stocks (for now) also helped risk gain a bit more of a foothold.
Read the full Asian Session Morning on the Vantage FX News Centre here.
[B]RBNZ Cuts Rates:[/B]
As expected, the Reserve Bank of New Zealand cut interest rates by 0.25% from Wellington this morning. I know that I’ve used the Auckland skyline as my cover photo for today’s blog, but how good does it look! …I apologise to any readers from Wellington that I may have upset.
The market was however looking for a much more dovish tone from Wheeler but with the jawboning toned down and the now standard line of:
“Some further easing seems likely.”
The Kiwi Dollar actually rallied quite hard across the board after the cut.
Read the full Asian Session Morning on the Vantage FX News Centre here.
[B]Jobless Claims:[/B]
Overnight’s Unemployment Claims number out of the US smashed expectation. The 255K print beat the 279K expectation, meaning the number came in at its lowest level since 1973! What were you doing in 1973?
“USD Unemployment Claims 255K v 279K expected.”
Read the full Asian Session Morning on the Vantage FX News Centre here.
[B]The Monday:[/B]
Welcome to another FOMC week!
While probably not yet in play. the Fed’s rhetoric out of the meeting will be hugely influential in how the US Dollar behaves heading into the following month.
Economists surveyed suggest that still 80% believe that the Fed will move to hike rates in September, meaning that a clear statement of intent could be given on Wednesday. The Fed has spoken before about limiting market surprises so a hawkish tone could signal liftoff is imminent.
Read the full Asian Session Morning on the Vantage FX News Centre here.
With FOMC on Wednesday during the New York session, we take a look at what to expect and then preview each of the majors daily charts. Keep an eye on the Vantage FX Twitter and Facebook Page over the next few days as we take a look at the charts in more detail through the week leading into the meeting.
Read the full Technical Analysis Post on the Vantage FX News Centre here.
[B]Chinese Stock Woes:[/B]
After what seemed like a settled week, Chinese stocks were back in the news overnight with some massive falls ripping through markets. The Shanghai Composite Index capitulated, suffering an 8.5% loss on the day, its worst performance since February 2007!
This drop was on the back of concerns that the Chinese government is faltering on its measures to artificially prop up the market.
“Investors are not confident that the bull market will return any time soon.”
Read the full Asian Session Morning on the Vantage FX News Centre here.
[B]FOMC Day:[/B]
The day has arrived. While economic factors have pushed back the earliest possible liftoff month to September or December, it’s the tone of tonight’s FOMC statement that will have the most significant impact on Forex markets.
With the odds of a rate hike in September now priced in at 50/50, I am of the opinion that they are more likely to move using a policy of stabilisation rather than being forced into hitting the market hard with multiple hikes clumped together. It’s all about beginning the normalisation process after rates have been at zero for so long and hiking early in September is conducive to this train of thought.
Read the full Asian Session Morning on the Vantage FX News Centre here.
[B]Countdown to Liftoff:[/B]
Although the Federal Reserve didn’t give a clear signal on the timing of liftoff, the rhetoric of improving housing and labour markets shows that the countdown has at least begun.
Fed officials have indicated that a September rate hike is now a real possibility after citing that the economy has overcome its first quarter slowdown and despite external factors and energy market worries, that the economy has actually expanded moderately.
Read the full Asian Session Morning on the Vantage FX News Centre here.
[B]Edging Closer:[/B]
USD Advance GDP (2.3% v 2.6% expected)
USD Unemployment Claims (267K v 268K expected)
With these US numbers overnight fairly close to expectations, the market has interpreted them as not missing by enough to slow down the Fed’s target of raising rates by the end of the year. An important revision was made to the Q1 GDP number, signalling economic growth and giving Yellen yet another excuse to forge ahead.
Read the full Asian Session Morning on the Vantage FX News Centre here.
[B]Getting up to Date:[/B]
Monday morning and we’re ready for another big week! But first, what happened over the weekend?
Most importantly, the USDX once again tested major trend line support but kicked off it hard in a volatile Friday night’s trading full of 2nd and 3rd tier data.
Read the full Asian Session Morning on the Vantage FX News Centre here.
[B]RBA Preview:[/B]
RBA Tuesday! Although there isn’t much chance that Stevens will pull the trigger on another cut to fresh record lows, the accompanying statement and the wording that the bank provides will be key to how the Aussie Dollar reacts.
Cash rate futures have priced in only a 9% chance that the RBA will cut rates to fresh 1.75% lows this afternoon in Sydney, and this sentiment is backed up by the Reuters economist survey, with only 1 out of the 22 forecasting a cut. Yes, there is always 1 or 2 looking to get their name up in lights for taking a contrarian view. Wouldn’t it be interesting to know which of these economists are actually taking an AUD/USD position into the decision on the back of their surveyed opinion!
Read the full Asian Session Morning on the Vantage FX News Centre here.