Good morning. Twenty fours ago, it appeared that Greek Prime Minister Tsipras had finally capitulated with a conciliatory letter to EU creditors asking for a new bailout that would accept many of their terms. North American equities took the baton from Europe and finished the day a sea of green, optimistic a deal was imminent. But by the end of the North American session, Mr. Tsipras had returned to his combative tone in a television address to the Greek people. Mr. Tsipras once again explained that Greece was being “blackmailed” and urged his constituents to take pause before this weekend’s referendum. The EURUSD rate, trading nearly 200 pts below this week’s high, remains in limbo now before the US jobs report kicks off a long holiday weekend.
Overnight, data was scarce as the results of Australia’s trade deficit highlighted the Asia session. It was reported the Australia’s deficit was reduced in May to $2.75 billion as April’s initial deficit of $3.9
billion actually ballooned to $4.15 billion. The Australian dollar eased as a result, falling further versus the stronger greenback especially. Chinese stocks continued their slide, ignoring any moves by policy makers in China to restore confidence. Shanghai’s benchmark index crashed 4,000 points for the first time since April and Chinese markets have now lost more than 20% in value since June 12th. In Europe, it was rather quiet but the Riksbank policy decision did garner a bit of attention as the central bank eased an additional 10 bps and extended their QE program from September to year end. This adds further spotlight to the fact the US may in fact be the only country on planet Earth considering raising interest rates. Take into contrast the situations in Europe and mainland China, and it is a wonder the dollar is not trading even higher. As is the case on NFP, the markets have grinded into very tight ranges with EURUSD keeping a 40 pip range for the last twelve hours. Expect a lot of trade desks in the US to be empty by 12pm today as participants get out of dodge for the long holiday weekend.
Read the rest of the article Investors Await Greek Referendum