In Greece, it has been a defining week as back and forth negotiations continue. In a crisis meeting, Greek PM Tsipras offered a reforms package in an attempt to break the deadlock and receive further aid. Aside from foreign creditors, Greece owes the IMF a debt installment of 1.5 billion Euros ($1.7 billion). IMF’s Lagarde said the June 30 payment deadline for Greece is “definitive”.
All three central banks this week announced no change in their respective rates. The US Federal Reserve, Bank of England, and Swiss National Bank kept their rates at less than 0.25 percent, 0.75 percent, and -0.75 percent, respectively. The BOE MPC also voted unanimously to keep the Asset Purchase Facility unchanged. Meanwhile, the Federal Reserve Board still expects a moderate expansion in economic activity.
A flurry of news has been published in the United States. The Philly Fed Manufacturing Index, Building Permits, Current Account, and Jobless Claims all came in better than forecast. Industrial Production slipped 0.2 percent in May, its third consecutive monthly decline. One economist has declared the factory sector is in a technical recession as IP posted disappointing figures for six straight months.
ZEW Economic Sentiment in Germany and Eurozone were both down this June (31.5 and 53.7, respectively).
In the UK, Claimant Count Change was much weaker than anticipated at -6,500. Meanwhile, Average Earnings Index edged higher by 2.7 percent. CPI was spot on at 0.1 percent, while PPI Input and RPI came in lower at -0.9 percent and 1 percent, respectively.
Gold attempted to break the $1,200 level but fell short of doing so. Nevertheless, the yellow metal is on to its second bullish week and we could see more upside attempts. The lower $1,100s remain vulnerable, though.
Oil has seen no change. It remains confined in a tight range close to the $59. We need a strong stimulus to break either side of this consolidation. Long-term downtrend remains intact.
EURUSD posted its third bullish weekly close but the overall distance traveled is actually meager. We still need to see a push through 1.1400 before expecting higher ground. Bulls are very much in favor at this time.
Another strong weekly finish put GBPUSD on a higher ground and closer to the 1.6000 level. Expect a retracement back towards 1.5600 if sellers return to the game.
USDJPY posted a bearish weekly inside bar with a close in mid-122s. The attempt through 124 has been pushed down mid-week, so buyers need to try again this week. Further upside failures could more buyers in “abandon ship” mode.
The Week Ahead
Following a jam-packed week, the last full week of June would be rather brief compared to its usual form.
On Monday, the news releases will be in the form of BOJ Monthly Report; Eurogroup meetings and Euro Summit; and US Existing Home Sales. China will celebrate the Dragon Boat Festival.
Tuesday will have more activity, including China’s HSBC Manufacturing PMI; Flash Manufacturing PMI and Flash Service PMI from Germany, France, and the Eurozone; UK CBI Industrial Order Expectations; US Durable Goods Orders, Flash Manufacturing PMI, and New Home Sales.
Wednesday will be brief but start early with BOJ’s Monetary Policy Meeting Minutes, followed by Germany’s Ifo Business Climate; SNB Quarterly Bulletin; US Final GDP.
Thursday will also be brief with GfK German Consumer Climate; Eurogroup meetings; US Jobless Claims, Core PCE Price Index, Personal Spending, and Personal Income.
Friday ends the week with New Zealand’s Trade Balance; Japan’s Tokyo Core CPI and Household Spending; Germany’s Import Prices; Eurozone M3 Money Supply and Private Loans; and US Revised UoM Consumer Sentiment.