US dollar strength is more than just Greece, stocks rally

Quick Recap

Greece is back in the news and a clear and present danger to the Euro and global markets. There is a lot of backwards and forwards but as my colleague from Business Insider UK Mike Bird wrote overnight we are entering the end game. Greece simply does not have the cash to repay without a deal.

The very notion it has to repay, when everyone knows it can’t, to get a deal to stave off default is ridiculous. The lenders to Greece, and the investment bank which helped Greece hide its true debt position for years, should be paying. The politicians responsible have lost their jobs but it’s the greek people who suffer.

I’ll climb off the soapbox but lenders have duties too.

There is chat of a deal and we’ll see if it materialises but something has to give.

I’m not convinced the stonger US dollar was entirely associated with greece. US 10 year bonds sold off again even though the data was weak. Perhaps, this is what I’m thinking, the paper released by the San Francisco Fed overnight suggesting with new seasonal factors US growth is more like 1.8% not 0.2% reinforced that the fed is still on track to tighten rates in 2015.

That US dollar strength knocked currencies lower and the Aussie is back below 80 cents today as we await the minutes from this months RBA meeting.

Elsewhere gold is holding in given increased uncertainty while oil is very close to breaking lower.  Stocks made new all time highs in the US while Europe was also bid. That helped the ASX futures overnight but the banks still have some issues.

On the day

On the data front today the RBA Minutes are out at 11.30 and even though we know everything we need to now, or at least should after the SoMP, the market will be watching them closely. Before that we get the first update of the ANZ weekly consumer confidence after the budget at 9.30am. Globally CPI and or PPI is being released in New Zealand, the UK and EU. The ZEW survey is out in Germany and in the US tonight we see housing starts and building permits along with the Redbook index.

Here’s the overnight scoreboard (8.33am AEST):

• Dow Jones up 0.14% to 18,298
• Nasdaq up 0.6% to 5,078
• S&P 500 up 0.3% to 2,129
• London (FTSE 100) up 0.12% to 6,986
• Frankfurt (DAX) up 1.29% to 11,594
• Paris (CAC)up 0.37% to 5,012
• Tokyo (Nikkei) 19,890
• Shanghai (composite) down 0.59% to 4,283
• Hong Kong (Hang Seng) down 0.83% to 27,591
• ASX Futures Overnight (SPI June) +20 to 5,685
• AUDUSD: 0.7990
• EURUSD: 1.1315
• USDJPY: 119.99
• GBPUSD: 1.5657
• USDCAD: 1.2151
• Crude: $59.43
• Gold: $1,225
• Dalian Iron Ore (September): 419.5

CHART OF THE DAY: AUDUSD 

0.7920/30 – that’s the level to watch today.

Catalyst for a move, in either direction, could be the RBA minutes at 11.30 so watch out.

Amazing price action in the Euro…by the time I wrote the Asian trading wrap I was sure the Euro was likely to turn lower again. Rooster, feather duster, rooster – thats trading sometimes – jst have to keep the rhetoric out of trades.