Quick Recap
US non-farms last night were a little weaker than expected printing 233,000 and there were 60,000 of negative revisions to the previous two months outturns. Add in flat wages and overall the market took the view that the pressure on the Fed was released a little by the data.
That meant the Euro rallied into the 1.1120 region before drifting back a little. The Aussie and Kiwi, which had been under pressure late yesterday afternoon recovered from their lows. In particular the Aussie essentially retouched the lows for the week and found some buying.
Stocks were down a little in the US where rates rallied as well while in Europe save for the UK which had a small rally the continent saw more stocks market falls as the weekend’s Greek referendum looms large on investors minds.
As Soc Gen wrote in a note to Asian clients this morning – most investors, themselves included – believe the Yes vote will prevail on Sunday. Of course that means there is a massive risk for markets but it seems that the odds are firming for the yes vote.
That’s even though the the IMF said, again, what we all know: Greece needs a big debt write off if it is ever to really get out from under its debt and economic problems. That’s a big help to the No vote and last night finance minister Varoufakis said overnight he’d rather cut his arm off then sign the deal and that he’ll resign if the Greek people vote Yes to the referendum.
We’ll know Monday Asian time I’m guessing.
On the day
On the data front, retail sales for May are out in Australia today, the US is out for the 4th of July holiday, and in Asia and Europe it’s services PMI day – that includes the AIGroup’s Services PMI here in Australia.
Here’s the overnight scoreboard(9.00am AEST):
- Dow Jones down 0.16% to 17,730/li>
- Nasdaq down 0.08% to 5,009
- S&P 500 flat at 2,076
- London (FTSE 100) up 0.33% to 6,630
- Frankfurt (DAX) down 0.73% to 11,099
- Tokyo (Nikkei) up 0.95% to 20,522
- Shanghai (composite) down 3.49% to 3,912
- Hong Kong (Hang Seng) up 0.12% to 26,282
- ASX Futures overnight (SPI September) -19 point to 5,521
- US 10 Year Bonds -4 points to 2.38%
- German 10 Year Bonds +4 to 0.85%
- Australian 10 Year Bonds -2 points to 3.08%
- AUDUSD: 0.7635
- EURUSD: 1.1088
- USDJPY: 123.04
- GBPUSD: 1.5604
- USDCAD: 1.2539
- Crude: $56.54
- Gold: $1,165
- Dalian Iron Ore (September): 415.5
CHART OF THE DAY: Aussie dollar
The Aussie dollar touched the low for the week again last night and found support once again before this little rally.
That makes 0.7580/90 the key region for the outlook.
Even though the 4 hour charts suggest a rally the release of retail sales are going to be important today.
We’ve been discussing the Darvas box US Oil has been in for a while recently. It’s had an interesting day so I’ll reiterate what I said yesterday.
We are now approaching the bottom of the box where support should be found. We’ll see how the price action goes, I’m cutting position by 50%, and respect the base unless or until it breaks. That’s where the other 50% will come off, below $56. But if the base breaks then oil could slip sharply lower. It has to break first.
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