Investors’ excitement and anticipation is high amid the Greek crisis. Greece’s latest budget proposals are affecting the whole market, hopefully reaching its decision later this week. While traders remain skeptical, the hopeful mood is dominating the European markets today.
After one-month high of $1,1440 level against dollar due to optimism towards Greece deal with the proposals of changes such as retirement age and income tax, Euro slipped back 0.6% to $1.1279.
While momentum is currently on a positive side, if the Greece negotiations do not reach a positive conclusion before the deadline of 30th June, ECB might consider increasing the cuts on Greek assets which will lead to capital control.
Eurozone ministers will gather again on Wednesday to work out the details and hopefully wrap up a detailed agreement by Thursday.
The dollar jumped 0.3% against yen to 123.69 level, still stuck below 13-year high of 125.86 reached earlier this month. Dollar strength against euro caused by strong home sales figures of 5% rise on Monday. The market is back to its fundamental leader – possible higher U.S. interest rates.
Chinese shares see negative volatility with the Chinese factory activity hinted stabilization, but at the same time light up couple of red lights. While the sector shows improvement, the manufacturers keep cutting staff.
Headlines to watch for
Keep your eyes on preliminary manufacturing and services PMI for France, Germany and Eurozone. There is also May’s durable goods orders for US and new sales figures to watch out for.
UK Inflation Hearings (today)- UK inflation might support the Sterling if inflation expectations are raised, or otherwise pull the sterling downwards.
Durable Goods ex transportation(today)- If durable goods rise higher than 0.5%, the dollar will jump up with glee.
BoJ Meeting Minutes (today) – Yen will rise if BoJ protocol shows more agresiveness.
German IFO (Wednesday) – shows insight on business sentiment for German economy.
US GDP Q1 (Wednesday) – US Q1 GDP is not as important as the previous two, but still might dictate the direction of the dollar.
SNB Quarterly Bulletin (Wednesday)- shows insights into the SNB monetary policy.
Japanese Core CPI (Thursday) – USD/JPY is expected to rise if Core CPI in Japan falls low.