Asia shares slip on China stock jitters

Good morning,

- Asia shares slip on China stock jitters, dollar pressured

- Australian Dollar's 20% Drop Isn't Over Yet. Money managers and chart watchers are converging in their view that the more than 20 percent tumble in Australia’s dollar over the past year isn’t over yet. Harmonic Capital Partners and Deltec International Group are among those betting on further declines amid deteriorating commodity markets and a weakening Chinese economy. Technical analysts at Westpac Banking Corp. and CMC Markets Plc see risks the currency will slump toward 70 U.S. cents. “The current pressures go against the Australian dollar, so we are positioned for a continued weakening,” said Patrik Safvenblad, chief investment officer in London at Harmonic Capital.

- Asian stocks started Tuesday under a cloud with markets waiting nervously to see how Chinese shares fare later in the session after Monday's slump all but erased risk appetite.The dollar was under pressure as China jitters spurred flows into havens such as the yen, while commodities including oil and copper wilted amid fears of a collapse in demand from China.

- Iron ore prices to drop to $44 by the April-to-June 2016 – Goldman Sachs. While Goldman didn’t give a price target in the latest note, the bank said in a July 20 report that it expected prices to drop over the next four quarters from $49 a metric ton through September to $44 by the April-to-June period of 2016.

- IMF warns of gloomy euro zone outlook. The International Monetary Fund has warned the eurozone faces a gloomy economic outlook thanks to lingering worries over Greece, high unemployment and a banking sector still battling to shake off the financial crisis. The IMF’s latest health check on the eurozone found it was “susceptible to negative shocks” as growth continues to falter and monetary policymakers run out of ways to help. It called for an urgent “collective push” from the currency union to speed up reforms or else risk years of lost growth.

- NZD/USD continues upward journey, takes out 0.6650.

- GBP/USD ticks higher ahead of the UK GDP data. The pair has ticked higher to 1.5580 levels in anticipation of a strong UK second quarter GDP data due for release later today.

- The Ifo Business Climate Index for German trade and industry rose to 108.0 points in July from 107.5 points last month. Assessments of the current business situation improved significantly after last month’s setback. Business expectations were also somewhat more optimistic after declining for three consecutive months. The recent easing of the Greece situation contributed to stronger sentiment in the German economy.

- Escaping the Greek Debt Trap. Greece's debt is unsustainable. The International Monetary Fund has said so, and it's hard to find anyone who disagrees. The Greek government sees structural reform without debt reduction as politically and economically toxic..Senior officials circles say that 'There is precedent for this kind of arrangement. In 1991, Western governments, negotiating as the Paris Club, offered Poland a deal in which debt reduction was linked to structural reform. In the first stage, Poland received a 30 percent cut in the present value of its debt in return for agreeing with the IMF on the terms of a structural adjustment program. In the second stage, Poland received a further 20 percent cut contingent -- importantly -- on fulfillment of the structural conditions of its IMF program...A final noteworthy aspect of the 1991 deal is that Poland's principal creditor at the time was none other than Germany. That Germany has seen this kind of arrangement before is one reason it should consider it again.'

- Watch for today: UK growth rebounds, US home prices, US services PMI

Have a nice Day !