Vantage FX Asian Session Analysis

Good Morning BabyPips.com!

Each morning one of our Market Analysts posts an Asian Session Morning blog to the Vantage FX News Centre. We will now be sharing these posts with the BabyPips community inside this thread.

We’d love to hear your opinion on any of the themes and charts discussed, so please comment on the thread.

<strong>The €64,000 Question:</strong>
Yet another break down in talks between Greece and their European overlords bodes me to ask the question, is a Grexit actually a blessing for the Euro? Going one step further, does current EUR/USD strength reflect confidence in a deal or are the long term benefits of a stronger Euro without Greece driving trade?

Some brilliant quotes from IMF Chief, Christine Lagarde overnight:

“There is an urgent need for dialogue with adults in the room.”

Read the full Asian Session Morning on the Vantage FX News Centre here.

<strong>Morning View:</strong>
“Spartans! Ready your breakfast and eat hearty… For tonight, we dine in hell!”

Deadline week has arrived for Greece. Sure, we’ve heard that before but this time there will be no more can kicking. Either a deal will be struck between Greece and their creditors, or they will default on their debts.

The ECB has been pumping yet more liquidity into the Greek banking system over the weekend to asure that the system continues to operate under the huge strain that record bank withdrawals are causing. Greek banks are trying to encourage customers to convert cash into investment equity or use another European subsidiary to at least keep them on the books in some capacity but to no avail.

<a href=“http://bit.ly/1SBwfjx” target="_blank">Read the full Asian Session Morning on the Vantage FX News Centre here.</a>

Great share Vintage! I was looking some of these information and this is updated!

Thanks Patricia, I’m glad you’re finding the Vantage FX News Centre useful.

Stick around in this thread and please don’t be shy in sharing your thoughts and ideas.

<strong>Standard Greece:</strong>
After everything we’ve spoken about leading into last night, and the importance that markets, let alone the Greek people, are placing on these meetings, we get headlines flashing across the wires such as this:

“Senior officials say there’s been a mix-up with the documents sent to the bailout monitors.”

We then see follow up quotes trickling through like this:

“It’s not so dramatic, but they sent the wrong one by mistake.”

<a href=“http://bit.ly/1TIZ2UF” target="_blank">Read the full Asian Session Morning on the Vantage FX News Centre here.</a>

<strong>German Concessions:</strong>
We spoke about it last week, but it seems as though markets have come to the conclusion that Greece exiting the Euro is actually EUR/USD positive. Yes, I know it sounds crazy but think about it for a second.

Let’s face it, the European decision making process is driven by an export dominated Germany who are currently not enjoying the relief rally that EUR/USD has experienced over the last 6 months as the Euro has bounced off it’s bottom. If Greece goes, a huge weight is actually lifted from the Euro.

Read the full Asian Session Morning on the Vantage FX News Centre here.

Do you use the USDX chart in your trading?

Bonus points if you can tell us the city featured today and why it’s significant.

<strong>Morning View:</strong>
Overnight the latest meeting between Greece and it’s creditors was cut short. The toll is obviously showing on Greek Prime Minister Alexis Tsipras, with it being reported that the meeting ended with the group storming through the press area without so much as a single word to eagerly awaiting reporters.

After months of negotiations, you have nothing to say barely a week away from default? That doesn’t sound promising does it…

Really Tsipras is stuck. He has to give the IMF pension reform that he has promised the people he will not touch. Instead the offered rise in taxes are seen as a hollow promise that isn’t going to change anything fundamentally in managing the country’s debt.

Read the full Asian Session Morning on the Vantage FX News Centre here.

<strong>No Market Miracle:</strong>
The countdown to a Greek default is now at 5 days.

After yet another breakdown in negotiations last night, it looks as though markets will head into the weekend close without Greece moving closer to a deal with it’s creditors.

There was no shortage of headlines overnight causing EUR/USD to whipsaw up and down but no new progress to report and after a drop on rumours of a deal being reached, EUR/USD ended up back where it began almost immediately.

“Institutions unanimously agreed on Greece papers.”

“Greece and its creditors fail to reach compromise ahead of the Eurogroup.”

Read the full Asian Session Morning on the Vantage FX News Centre here.

<strong>Default Looms Large:</strong>
“It shouldn’t feel like Lehman Brothers. But it does.”

Greece has once again failed to come to a deal with it’s creditors to secure the credit that it needs to keep it’s floundering banking system above water. With the key IMF loan deadline set to expire on June 30, default is now well and truly in play. For all the talk and lead up, I can’t say I ever actually expected things to get this far… But here we are.

Read the full Asian Session Morning on the Vantage FX News Centre here.

<strong>Chinese Rate Cut:</strong>
With all eyes focused on the capital controls imposed on Greece, we also got an interest rate cut from China. The PBOC cut it’s benchmark lending rate to a record low while also lowering the reserve requirement ratio (RRR) for banks.

The RRR is important because it is the portion of deposits that a bank must have on hand as cash. This means that a RRR cut effectively encourages banks to loan more than they otherwise would have been able to, thus having a stimulatory effect.

Read the full (2nd) Asian Session Morning on the Vantage FX News Centre here.

[B]New Years Eve:[/B]
Well Financial New Years Eve anyway!

Just like today’s featured image, we should get some fireworks over Athens as the June 30 deadline passes and Greece officially defaults on its €1.6 billion debt to the IMF tonight.

With many European policymakers trying to downplay the impact of a Greek default on markets, the fact of the matter is we still just don’t know what the effect is going to be and how far the toxic damage will spread.

Read the full Asian Session Morning on the Vantage FX News Centre here.

[B]Default:[/B]
With Eurozone finance ministers refusing to budge on any last minute extensions of the Greek bailout program, Greece this morning became the first ‘advanced economy’ to default and is the first country to miss an IMF loan payment since Zimbabwe in 2001. Not exactly illustrious company there.

Read the full Asian Session Morning on the Vantage FX News Centre here.

[B]Jobs:[/B]
Yes that’s right, it’s NFP Thursday this week due to the Independence Day holiday in the US Friday so don’t get caught out. On trading desks I’ve sat on in the past, this has happened and makes funny stories when you look back… Just as long as it wasn’t you that missed the trade!

Last night’s infamous ADP number came in better than expected with an increase of 237K jobs compared to the 219K expected. A further sign of the improving US labour market and throwing yet another spanner in the works when it comes to when the Fed will provide liftoff on raising rates.

If tonight’s NFP report is similarly strong, the Fed could ignore Greek uncertainty and go ahead with raising rates. If it disappoints, the ‘uncertainty’ and ‘data dependent’ rhetoric will no doubt be regurgitated to the market.

Read the full Asian Session Morning on the Vantage FX News Centre here.

[B]Independence Day:[/B]
“Look at us. Everybody’s trying to get out of Washington, and we’re the only schmucks trying to get in.”

With it being the 4th of July in the US and with all the turmoil around Greece, today’s cover photo just seemed right.

On the back of last night’s Thursday Non-Farm Payroll miss, the odds of a Fed rate hike in September seem to be drifting. NFP came in at 223K v the 231K expected. This slight miss in itself didn’t put a whole lot of pressure on the USD, but last months’ 280K was revised down to 254K which added to the data dependent uncertainty and saw a USD sell off across the board.

Read the full Asian Session Morning on the Vantage FX News Centre here.

[B]Greferendum:[/B]
“OXI!”

The Greek people have spoken, with a landslide win to the ‘no’ side, voting against accepting the austerity terms that their Eurozone creditors have offered. But in reality, the vote and the result is still nothing but a complicated mess that throws up just as many questions as answers.

Read the full Asian Session Morning on the Vantage FX News Centre here.

[B]Minister No More:[/B]
The big news overnight out of Europe was the resignation of Greek Finance Minister Yanis Varoufakis. You can read a short statement posted on his personal blog aptly titled Minister No More.

“Soon after the announcement of the referendum results, I was made aware of a certain preference by some Eurogroup participants, and assorted ‘partners’, for my… ‘absence’ from its meetings; an idea that the Prime Minister judged to be potentially helpful to him in reaching an agreement. For this reason I am leaving the Ministry of Finance today.”

Read the full Asian Session Morning on the Vantage FX News Centre here.

[B]Can you Decipher the Notes?:[/B]
It’s now coming into Wednesday after the weekend’s referendum vote and low and behold, Greek banks are still closed, deadlines are still being pushed back and a solution seems as far away as ever before.

But could the answer to Greece’s problems be written on this hotel notepad that new Greek Finance Minister Euclid Tsakalotos was holding while posing for happy snaps alongside Eurogroup President Jeroen Dijsselbloem?

Read the full Asian Session Morning on the Vantage FX News Centre here.

[B]Chinese Woes Weigh on Commodities:[/B]
“Chinese steel now cheaper than cabbage.”

That is the type of headlines we woke up to in Asia this morning. What a glorious time to be alive!

This was one of my favourites, quoted only as ‘trader’ from an almost comedic SMH article this morning:

“I would be better off going home to plow the fields rather than try to make money selling steel.”

Read the full Asian Session Morning on the Vantage FX News Centre here.