- China CSRC bans big shareholders from cutting stakes for next 6 months.
- China CBRC to help stabilize capital market, allow financial institutions to renegotiate lending terms using stocks as collateral, allow banks to ease margin requirements on wealth mgmt/trust clients, encourage interbank lending.
- Chinese stock investors unwound over $100 bln in leveraged bets since June 18.
- China June CPI unchanged m/m, +1.4% y/y, -0.1% and +1.3% eyed.
- China June PPI -0.4% m/m, -4.8% y/y, -4.5% y/y eyed.
- Japan PM Abe – Working closely with G7 on Greece, to ensure EZ economic stability, excessive JPY strength corrected, economic confidence restored.
- MoF flow data week-ended July 4 – Japanese buy net Y483.8 bln foreign stocks, Y205.2 bln bonds, sell Y41.7 bln bills; foreign investors sell net Y185.4 bln Japanese stocks, buy Y476.5 bln bonds, sell Y832.1 bln bills.
- Japan wrapping up bilateral talks with six TPP partners.
- Japan May core machinery orders +0.6% m/m, +19.3% y/y, -5.0% and +16.3% eyed, value of May core machinery orders highest since June ’08.
- Japan June money supply M2 +3.8% y/y, M3 +3.1%, broad liquidity +4.3%, May revised +4.1%, +3.3%, revised +4.5%.
- IMF Lagarde – Cannot bend rules for Greece.
- SF Fed Williams – Sticks to two interest rate hike by year end view.
- Australia June employment +7.3k, unemployment 6.0%, participation 64.8%, -5k, 6.1% and 64.7% eyed, full time employment +24.5k.
- RBA researcher: Australian house prices 30% undervalued.
- Melbourne rent price hit record high – AAP.
- NZ June electronic card retail sales +0.5% m/m, +5.0% y/y, May +1.3%, +3.2%.
- (0200 ET/0600 GMT) Sweden Jun unemployment; last 7.5%.
- (0200 ET/0600 GMT) Germany May trade balance, E21.0 bln surplus eyed; last E22.3 bln surplus.
- (0830 ET/1230 GMT) US w/e initial jobless claims, 275k eyed; last 281k.
Key Events Ahead
- N/A BoE Woods speech at London insurance seminar.
- (0300 ET/0700 GMT) Buba conference in Frankfurt, Gov Weidmann opening speech, others later.
- (0700 ET/1100 GMT) BoE MPC policy announcement, no change 0.5% bank rate, GBP375 bln QE eyed.
- N/A Toronto Global Forum, various speakers.
- (1015 ET/1415 GMT) Fed Gov Brainard speech in Washington, DC.
- (1230 ET/1630 GMT) KC Fed George speech at Stillwater Economic Forum.
FX Recap
EUR/USD is supported above 1.1000 levels and currently trading at 1.1078 levels. It has made intraday high at 1.1080 and low at 1.1061 levels. The pair remained trading above $1.10 after the FOMC minutes, as the detailed information on the latest FOMC meeting did not deliver any surprise. There has been no progress in negotiations between Greece and the euro group and the country has a final deadline on Sunday to propose economic reforms or face the consequences. Initial support is seen around at 1.0914 and resistance at 1.1171 levels.USD/JPY is supported above 121.00 levels and posted a high of 121.28 levels. It has made intraday low at 120.45 and currently trading at 121.20 levels. Pair witnessed nearly 200 pips fall on Wednesday after the Japanese currency benefited from its traditional safe-haven status, as China and Greece add to global risk aversion across the market. The major extends its overnight recovery from fresh 2-month lows mainly driven by short-covering rally after suffering heavy losses on Wednesday. The major printed fresh 2-month lows at 120.42 in overnight trades as markets continue to digest FOMC minutes which revealed that Fed appeared less eager to start hiking policy in light of possible lingering Q1 softness and potential weakness from abroad that could spill over to the US. Moving ahead, markets continue to monitor Greece developments as Euro group meetings continue later today. China worries may also have major impact on the pair. Near term resistance is seen at 124.57 and support is seen at 120.63 levels.GBP/USD is supported below $1.5400 levels. It made an intraday high at 1.5382 and low at 1.5355 levels. Pair is currently trading at 1.5380 levels. Market participants will be focusing on the BoE rate and QE announcement on Thursday. It is very likely the central bank will leave its monetary policy stance unchanged in July – the base rate will stay at the record low of 0.5% and the QE volume at £375 billion. Initial support is seen at 1.5367 and resistance is seen around 1.5737 levels.USDCHF is supported above 0.9400 levels and trading at 0.9448 levels and made intraday low at 0.9445 and high at 0.9458 levels. Pair is trading on flat bias as today is data thin calendar for Switzerland. Market will eye on US macro data release due later in a day for the further direction. Near term support is seen at 0.9341 levels and resistance is seen at 0.9500 levels.AUD/USD is supported above 0.7400 levels and trading at 0.7471 levels. It has made intraday high at 0.7474 levels and low at 0.7391 levels. Focus shifted from Greece and FOMC minutes in Asia as markets cheered upbeat China’s inflation as well Australia’s employment report, boosting the antipodeans currencies across the board. The Aussie is swinging sharply into positive territory following an upbeat June jobs report. Pair remains under downward pressure from falling Chinese equities and commodity prices. The Australian economy added 7.3k jobs in June, versus the zero figures that was expected. The jobless rate was 6.0%, matching expectations. Initial support is seen at 0.7360 and resistance at 0.7647 levels.
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