Intraday Market Thoughts

EUR Hits 1.45 Ahead of CPI and 2nd Greek Vote

by Kyle Morrison
Jun 30, 2011 8:01

Euro passes 1st austerity vote with implementation vote next, while remaining supported by rate expectations. Sterling Nationwide Gfk confidence data, Japanese industry continues to recover, Canada GDP and US weekly jobless. THE LATEST PREMIUM TRADES for THURSDAY are now ready.

The single currency continues to be supported by the quaint notion that somehow yesterdays successful Greece austerity vote has stabilised things in the beleaguered country. While that maybe partly true in the short term, there remains the small matter of todays implementation vote, where some parts of the package could be unpicked so to speak to make it slightly more palatable to the enraged population. In any case the main reason the single currency continues to find support especially against the US dollar is down to perceptions of a likely hike in interest rates at next weeks monthly ECB which could well be reinforced by the release of todays Eurozone CPI figures for June which are expected to rise further from 2.7% to 2.8%.

There has also been talk that Chinas SAFE is doing all it can to transfer billions of dollar denominated holdings into euros.


Premium Intraday Insights

Non Subscribers click here:

German unemployment data is also due out this morning and expectations are for a drop of 17k and the rate to remain unchanged at 7%

The pound hit a one year low yesterday on its trade weighted index as the woes of the British economy continued to weigh on it, as well as the expectation that no action on interest rates would be forthcoming any time soon. Todays Nationwide Gfk consumer confidence number for June hasnt really done anything to relieve the pressure coming in at -25, slightly worse than expected.

In Asia despite the recovery in industrial production yesterday Japan continues to struggle with the after effects of the earthquake with vehicle production for May down 30.9%, albeit an improvement on Aprils 60% decline but still lower. On a more positive note construction orders were up 25.5% while housing starts beat expectations of 3.1%, coming in at 6.4%.

Before the US markets open it is hoped that the recent rise in US weekly jobless claims will start to show some signs of reversing, while Canadas latest GDP numbers could well disappoint in the wake of yesterdays surprise surge in inflation.


Latest IMTs