- Greeks defy Europe with overwhelming referendum “NO”.
- German Economic Minister Gabriel – Tsipras has torn down last bridge of compromise, other conservative German lawmakers agree, Greece may be better off outside Euro.
- Base case now for Greece to exit Euro zone.
- BOJ Gov Kuroda – Monitoring market moves carefully after Greece vote, economy continues to recover, inflation likely @zero for now, to maintain QQE for as long as needed, will adjust policy as needed.
- Japan Finance Minister Aso dittos BoJ Kuroda, MoF- BOJ ready to respond if needed.
- CabSec Suga – Greece impact on Japan stock, FX markets limited.
- Fitch – Public debt to remain high under Japan fiscal plan.
- European banks rush to issue samurai bonds.
- Greece paid Y500 mln in interest on Euroyen issues on 3rd.
- China takes more drastic action to halt market slide, suspends all IPOs, brokers-fund managers to invest at least US$19 bln in shares, to set up stabilization fund.
- ECB Coeure – ECB prepared to take additional measures if needed.
- Australia June TD/MI inflation index +0.1% m/m, +1.5% y/y, May +0.3%, +1.4%, still below RBA’s 2-3% target band.
- Australia June overall job ads +1.3% m/m, newspapers -1.3%, internet +1.4%.
- (0200 ET/0600 GMT) Germany May industrial orders, -0.4% m/m eyed; last +1.4%.
- (0300 ET/0700 GMT) Spain May industrial output, +2.6% y/y eyed; last +1.8%.
- (0315 ET/0715 GMT) Switzerland June CPI, -0.1% m/m, -1.2% y/y eyed; last +0.2%, -1.2%.
- (0430 ET/0830 GMT) Euro Zone July Sentix index, 15.0 eyed; last 17.1.
- (0945 ET/1345 GMT) US Jun Markit services/composite PMI – final; flash 54.8, 54.6.
- (1000 ET/1400 GMT) US Jun ISM non-manufacturing PMI, 56.2 eyed; last 55.7.
- (1000 ET/1400 GMT) US July employment trends index; last 128.6.
Key Events Ahead
- N/A France BTF Treasury note, Netherlands 5-month DTC auctions.
FX Recap
EUR/USD is supported above 1.1000 levels and currently trading at 1.1035 levels. It has made intraday high at 1.1055 and low at 1.0967 levels. The euro started early morning Asian trading lower, shedding as much as 2% after the Greeks voted to refuse further austerity measures, conditions requested from a debt-ridden country by international creditors. A No vote implies the ECB will cancel Greek bank funding which then hastens a Grexit. Greek Prime Minister Alexis Tsipras is reportedly holding an emergency meeting on banking sector liquidity on Monday. Today German factory orders and Euro zone Sentix index will release in European session. Initial support is seen around 1.0952 and resistance is seen around 1.1218 levels.USD/JPY is supported above 122.00 levels and posted a high of 122.69 levels. It has made intraday low at 121.83 and currently trading at 122.32 levels. The major extends its recovery from six-week lows reached on Greek referendum led flight to safety which boosted the JPY bulls across the board. The yen bulls were in complete control versus the greenback in early moves as traders flocked to safety-havens such as gold, treasuries, yen etc., after uncertainty gripped the markets as the Greek referendum ended in landslide ‘NO’ victory for Greek government led by Tsipras. In the week ahead, Greek story will continue to remain in the spotlight while Fed minutes release will also be closely watched for hints on the timing of the Fed rate-hike. Near term resistance is seen at 124.57 and support is seen at 121.48 levels.GBP/USD is supported above $1.5500 levels. It made an intraday high at 1.5570 and low at 1.5532 levels. Pair is currently trading at 1.5556 levels. Britain’s service sector recovered from its steepest slowdown in nearly four years in June, a private survey showed on last Friday, and exceeding estimates. Markit services purchasing managers’ index (PMI) booked 58.5 during the sixth month of the year, compared to the 56.5 in May. Today is data thin calendar, market will eye on Greek story for the further movement in the parity. Initial support is seen at 1.5486 and resistance is seen around 1.5737 levels.USDCHF is supported above 0.9400 levels and trading at 0.9438 levels and made intraday low at 0.9412 and high at 0.9445 levels. Today Switzerland will release CPI data for the further movement as well as Greece story will also be watched out. Near term support is seen at 0.9341 levels and resistance is seen at 0.9500 levels.AUD/USD is supported below 0.5500 levels and trading at 0.7472 levels. It has made intraday high at 0.7517 levels and low at 0.7461 levels. The Australian dollar hasn’t had its best week falling sharply from above the key 0.77 level to a new six year low below 0.75. The Australian dollar was heavily sold-off across the board in Asia after Australia’s May retail sales missed expectations while the April revision also discouraged markets. A pickup in jobs growth is set to come to an end amid downward pressure on employment in mining and manufacturing. Job advertisements on the internet and in newspapers rebounded in June, rising 1.3 per cent, following a flat result in May, ANZ seasonally-adjusted figures show. Oil prices posted steep falls on Monday after the outcome from the Greek referendum boosted the US dollar, making the commodity less attractive. Oil started to trade the new week on a weaker note, with a stronger greenback weighing on prices following the results of the Greek referendum vote. Markets sentiment will be driven mainly by this week’s economic news from Australia as the RBA’s cash rate decision is scheduled on Tuesday while labour data report for June is due on Thursday. Initial support is seen at 0.7400 and resistance at 0.7647 levels.
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