Intraday Market Thoughts

Weekend Danger Looms

by Adam Button
Jun 25, 2015 23:21

Barring a miracle, markets will close on Friday without a Greek deal and that argues for paring risk trades in the day ahead. The Canadian dollar was the top performer Thursday while the Swiss franc lagged. Japanese CPI and employment data is due next.  

Greek negotiations have entered a period of extreme uncertainty. Headlines cross the newswires within minutes that are entirely contradictory. Some optimism remains but major compromise is still essential for a deal and time is running out.

Tsipras was rumored to have offered to resign as his party hardliners fight back against austerity. Other reports indicate there has been progress.

What's certain is that there are no high level meetings planned until Saturday and a leaders summit was called off. That means we'll head into the weekend without a deal and in danger of a breakdown in negotiations. Watching the headlines is essential but unless there is a breakthrough risk trades are in danger ahead of Friday's close.

Overall, Thursday trading was subdued. The PCE report continued to show benign inflation but consumer spending rose 0.9%, the most since 2009 and beating the 0.7% consensus. The Markit services PMI, however, was on the soft side.

The SNB's Jordan was jawboning again and weighed on the franc. He told an industry lobby association that the central bank can counter CHF strength with intervention and lower rates.

The yen was generally stronger on risk aversion but the range was tight in US trading. The key reports in the hours ahead are Japanese jobs and inflation. The May national CPI report is expected to show a meager 0.4% y/y rise and flat core reading. The June Tokyo CPI number is expected up 0.5% y/y.

Today's Premium trade is in a GBP pair, issued with 2 charts identifying rare similarities between now and 2009. Full details in the Premium Insights.
Act Exp Prev GMT
Tokyo CPI (JUN) (y/y)
0.5% Jun 25 23:30
Tokyo CPI ex Food, Energy (JUN) (y/y)
0.1% Jun 25 23:30
Tokyo CPI ex Fresh Food (JUN) (y/y)
0.1% 0.2% Jun 25 23:30
National CPI (MAY) (y/y)
0.6% Jun 25 23:30
National CPI Ex Food, Energy (MAY) (y/y)
2.2% Jun 25 23:30
National CPI Ex-Fresh Food (MAY) (y/y)
2.2% Jun 25 23:30
Markit PMI Composite (JUN) [P]
54.6 56.0 Jun 25 13:45
Markit Services PMI (JUN) [P]
54.8 56.7 56.2 Jun 25 13:45

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