Market Review - 29/06/2015 21:14GMT
Euro opens sharply lower to 1.0954 after snap referendum call before rebounding strongly to 1.1278
The single currency opened sharply lower on Monday and fell to a low of 1.0954 in New Zealand due to Greek talks failed, however, euro ratcheted higher in Asia on short-covering and then jumped up in European morning as European shares rebounded strongly from lows. Euro later rose to as high as 1.1278 before retreating near New York close.
Greek Prime Minister Alexis Tsipras pleaded in vain by phone with European officials to extend the program until a referendum on July 5 on its future terms. Greek PM Tsipras said aim is for referendum to bring continuation of negotiations with lenders; the stronger the rejection of creditor deal, the stronger the Greek hand in talks; does not think creditors want to throw Greece out of the eurozone, cost would be huge.
European Council President Donald Tusk told Greek Prime Minister Alexis Tsipras on Monday that he saw no willingness among member states to agree to Tsipras' request to an extension to bailout loans. A snap Reuters poll of more than 70 economists and traders taken on Monday put the probability of Greece leaving the euro zone at 45 percent, up from 30 percent a week ago.
S&P lowered Greece sovereign credit rating to CCC- from CCC. S&P indicated the probability of Greece exiting the eurozone is now about 50% and the probability of Greece exiting the eurozone is now about 50 pct. S&P interpreted Greece's decision to hold referendum on official creditors' loan proposals indication Tsipras government will prioritize domestic politics.
The British pound tracked euro's movements on Monday. Cable opened lower and then fell to an intra-day low of 1.5645 in New Zealand due to the weakness in euro but short-covering lifted the pair to 1.5744 before retreating to 1.5684. The pair rose to 1.5789 before falling to 1.5720 on cross buying in sterling.
BoE's Haldane said 'early lift off for BoE rates could be self-defeating; current UK rate appropriate, I have no bias on whether rates will rise or fall next; UK rate rise, however modest, would be seen as bad news by UK households and firms; odds are against BoE having enough room to cut rates when next recession comes, based on market rate expectations; growth in UK remains solid if unspectacular, recovery reasonably balanced; negative effects of recent sterling strength may outweigh positive news on wages; sterling strength since May likely to cut growth n inflation rates by 0.2% points over 2 years.'
Tuesday will see the release of U.K. GfK consumer confidence, New Zealand NBNZ business outlook, Australia's HIA new home sales, Japan's construction order and housing starts, Germany's retail sales, Swiss KOF indicator, Germany's unemployment rate, U.K. current account, GDP, inflation report hearings, Canada's GDP, U.S. Redbook, Chicago PMI and consumer confidence.
Euro opens sharply lower to 1.0954 after snap referendum call before rebounding strongly to 1.1278
The single currency opened sharply lower on Monday and fell to a low of 1.0954 in New Zealand due to Greek talks failed, however, euro ratcheted higher in Asia on short-covering and then jumped up in European morning as European shares rebounded strongly from lows. Euro later rose to as high as 1.1278 before retreating near New York close.
Greek Prime Minister Alexis Tsipras pleaded in vain by phone with European officials to extend the program until a referendum on July 5 on its future terms. Greek PM Tsipras said aim is for referendum to bring continuation of negotiations with lenders; the stronger the rejection of creditor deal, the stronger the Greek hand in talks; does not think creditors want to throw Greece out of the eurozone, cost would be huge.
European Council President Donald Tusk told Greek Prime Minister Alexis Tsipras on Monday that he saw no willingness among member states to agree to Tsipras' request to an extension to bailout loans. A snap Reuters poll of more than 70 economists and traders taken on Monday put the probability of Greece leaving the euro zone at 45 percent, up from 30 percent a week ago.
S&P lowered Greece sovereign credit rating to CCC- from CCC. S&P indicated the probability of Greece exiting the eurozone is now about 50% and the probability of Greece exiting the eurozone is now about 50 pct. S&P interpreted Greece's decision to hold referendum on official creditors' loan proposals indication Tsipras government will prioritize domestic politics.
The British pound tracked euro's movements on Monday. Cable opened lower and then fell to an intra-day low of 1.5645 in New Zealand due to the weakness in euro but short-covering lifted the pair to 1.5744 before retreating to 1.5684. The pair rose to 1.5789 before falling to 1.5720 on cross buying in sterling.
BoE's Haldane said 'early lift off for BoE rates could be self-defeating; current UK rate appropriate, I have no bias on whether rates will rise or fall next; UK rate rise, however modest, would be seen as bad news by UK households and firms; odds are against BoE having enough room to cut rates when next recession comes, based on market rate expectations; growth in UK remains solid if unspectacular, recovery reasonably balanced; negative effects of recent sterling strength may outweigh positive news on wages; sterling strength since May likely to cut growth n inflation rates by 0.2% points over 2 years.'
Tuesday will see the release of U.K. GfK consumer confidence, New Zealand NBNZ business outlook, Australia's HIA new home sales, Japan's construction order and housing starts, Germany's retail sales, Swiss KOF indicator, Germany's unemployment rate, U.K. current account, GDP, inflation report hearings, Canada's GDP, U.S. Redbook, Chicago PMI and consumer confidence.
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