Intraday Market Thoughts

Back to Fundamentals With Greece Temporarily Sorted

by Adam Button
Feb 23, 2015 0:39

The reaction in trading after the Greek deal late on Friday was to sell the euro and erase the bounce on the rumor. That could be an indication of how eager traders remain to sell the euro. Last week, the Australian dollar was the top performer while the loonie and Swiss franc lagged. The Swissy is under fresh pressure as the new week begins while the rest of the market is virtually unchanged. CFTC positioning data showed euro shorts trimmed.  Link to register for Ashraf's Tuesday webinar on Indices/FX 8pm GMT -  Sign up

Greece is mostly on the backburner on Monday. On the weekend, Fin Min Varoufakis said he was confident the Greek list of reforms would be approved. In four months when the current deal expires, it will be more drama but for now the market can focus on fundamentals.

The highlight in the week ahead will be Yellen's Humphrey Hawkins testimony beginning on Tuesday but the market will also refocus on state of the broader Eurozone. Over the past few weeks, data has quietly begun to beat expectations and more of the same could spark a relief rally.

Asia-Pac trading is light to start the week with the exception of the Jan BOJ meeting minutes at 2350 GMT. The main event on the day will be in European trading with German IFO data at 0900 GMT. The consensus is for the current conditions index to rise to 112.5 from 111.7 and for the expectations index to rise one point to 103.0.

Commitments of Traders

Speculative net futures trader positions as of the close on Tuesday. Net short denoted by - long by +. EUR -186K vs -195K prior JPY -49K vs -55K prior GBP -29K vs -39K prior AUD -54K vs -53K prior CAD -33K vs -33K prior CHF -6K vs -5K prior

Euro shorts had been near a record but scaled back for the time being. Traders are likely going to need a good reason to pile into a crowded trade. Yen shorts continue to pare while AUD is the second-least liked currency; with last week's rally, that could point to the chance of a squeeze.

Act Exp Prev GMT
Germany Expectations (FEB)
103 102 Feb 23 9:00

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