How to lift capital controls

Good morning,

- Greece's newest headache: How to lift capital controls…

- It is just the headache Greece's government does not need right now: how can it loosen the capital controls that are shielding its banks, but strangling the rest of the economy? For the past month, Greece has been financially cut off from the rest of the world. It is almost impossible for most Greeks to take money out of the country, thanks to a raft of capital control measures put in place on June 29 amid fears of a catastrophic bank run.

- So far $CHF has been the best performing major vs $USD after Monday's open with +0.06% spot returns, $AUD has been the worst with -0.07%.

- $NZD, $AUD, and $EUR are expected to be the most active majors vs $USD with 1W implied volatility at 13.50, 13.00, 11.48 respectively.

- What Does Australia Have in Common With Colombia and Russia? Excluding the brief fall at the worst point of the global financial crisis, this is the lowest level for the Aussie since 2007. Australia's currency has had one of the most rapid depreciations of its real exchange rate, only beaten by a ragged bunch of troubled economies. Kieran Davies of Barclays Plc estimates that the Aussie's 16 percent fall from 2013 to the end of the second quarter is the fastest after Colombia -- where growth has halved; Russia, which is in recession; Brazil, which is also in a slump, and Japan. All these economies bar Japan are struggling with plunging oil and commodity prices as China's economy is now in sluggish mode.

- RBS made no change to its EUR/USD forecasts this month. However after a hiatus of a few months, RBS thinks there is some risk of faster EUR/USD slippage to its 1.05 1-year target. The following are the major key factors in RBS argument along with its targets for EUR/USD, EUR/JPY, and EUR/GBP over the coming months. "None of this has much directly to do with Greece... Perhaps the most direct link to currencies is how respite from Greece-related tensions could see markets borrowing negatively yielding EUR again to fund more FX carry elsewhere," RBS argues."Other factors that support some renewed fall in EUR/USD this year: faster money positioning in EUR/USD is now much cleaner than it was a few months ago, short EUR/USD is a far less crowded trade," RBS adds. "Also, the German government bond market, which went into price melt-down in March, raising serious risks to other most owned positions like short EUR/USD, has stabilized," RBS notes.

- $AUDUSD posted its largest daily decline since July 3 this past Friday as China's (Jul P) PMI fell to its lowest level since April 2014.

- Oil Bulls Flee at Fastest Pace in Three Years as Glut Expands. Speculators’ conviction that oil will rally weakened at the fastest pace in three years, just before futures tumbled into a bear market. The net-long position in West Texas Intermediate contracted 28 percent in the seven days ended July 21, U.S. Commodity Futures Trading Commission data show. Long positions dropped to a two-year low while short holdings climbed 25 percent.

- Sales of New Homes in U.S. Unexpectedly Fall to Seven-Month Low. Purchases of new U.S. homes unexpectedly retreated in June and prior readings were revised down, painting a picture of less robust improvement during the industry’s busiest time of year. Sales fell 6.8 percent to a 482,000 annualized pace, the weakest since November and lower than any forecast of economists surveyed by Bloomberg, Commerce Department figures showed Friday in Washington.

- BOJ's Nakaso: Drag of oil prices on CPI to be largest this summer.Japan inflation trend continuing to improve...Also, BOJ's easing has been exerting intended effects, Japan inflation expectations rising on the whole.

- Hedge Funds are net short on gold futures for the first time on record according to Bloomberg

- Watch for today: US Durable Goods, German IFO, EU Money Supply.

Have a nice Week !