The Japanese Yen emerged the top performing currency last week with the US Dollar tailing a close second. The Greece developments were clearly a catalyst as investors flocked to the safe haven Yen and the Greenback, shedding the more risky commodity currencies. Noticeably, in the risk off mode, the Kiwi, Aussie and Canadian dollars made up the tail end of the scale, losing close to -2% on average.
Despite the uncertainty, the Euro single currency managed to perform fairly stronger albeit weaker than the Greenback. For the week, EURUSD lost -0.44% but the single currency maintained a strong footing against the commodity risk currencies.
Economic data from the US supported the Greenback with the June payrolls report printing an ok jobs number. The US markets were closed on Friday making it a short trading week. The major focus remains this Sunday’s Greece referendum results.
Fundamentals for the Week July 6 – 10
|06-Jul||03:30||AUD||MI Inflation Gauge m/m||0.30%|
|04:30||AUD||ANZ Job Advertisements m/m||0.00%|
|09:00||EUR||German Factory Orders m/m||0.00%||1.40%|
|6th-9th||GBP||Halifax HPI m/m||0.20%||-0.10%|
|11:30||EUR||Sentix Investor Confidence||15.6||17.1|
|GBP||Housing Equity Withdrawal q/q||-12.1B||-13.0B|
|16:45||USD||Final Services PMI||54.8||54.8|
|USD||ISM Non-Manufacturing PMI||56.5||55.7|
|USD||Labor Market Conditions Index m/m||1.3|
|17:30||CAD||BOC Business Outlook Survey|
|01:00||NZD||NZIER Business Confidence||23|
|07-Jul||02:30||AUD||AIG Construction Index||47.8|
|AUD||RBA Rate Statement|
|09:00||EUR||German Industrial Production m/m||0.10%||0.90%|
|09:45||EUR||French Gov Budget Balance||-59.8B|
|EUR||French Trade Balance||-3.3B||-3.0B|
|10:00||CHF||Foreign Currency Reserves||517.5B|
|11:30||GBP||Manufacturing Production m/m||0.20%||-0.40%|
|GBP||Industrial Production m/m||-0.30%||0.40%|
|Tentative||GBP||30-y Bond Auction||2.86|1.6|
|17:00||GBP||NIESR GDP Estimate||0.60%|
|USD||JOLTS Job Openings||5.30M||5.38M|
|USD||IBD/TIPP Economic Optimism||48.9||48.1|
|02:01||GBP||BRC Shop Price Index y/y||-1.90%|
|JPY||Bank Lending y/y||2.60%|
|08:00||JPY||Economy Watchers Sentiment||53.2||53.3|
|12:30||GBP||FPC Meeting Minutes|
|14:30||GBP||Annual Budget Release|
|15:30||CAD||Building Permits m/m||11.60%|
|17:30||USD||Crude Oil Inventories||2.4M|
|20:01||USD||10-y Bond Auction||2.46|2.7|
|21:00||USD||FOMC Meeting Minutes|
|USD||FOMC Member Williams Speaks|
|22:00||USD||Consumer Credit m/m||18.6B||20.5B|
|02:01||GBP||RICS House Price Balance||37%||34%|
|09-Jul||02:50||JPY||Core Machinery Orders m/m||-4.60%||3.80%|
|JPY||M2 Money Stock y/y||4.00%||4.00%|
|06:45||JPY||30-y Bond Auction||1.53|3.1|
|09:00||EUR||German Trade Balance||20.6B||22.3B|
|JPY||Prelim Machine Tool Orders y/y||15.00%|
|14:00||GBP||Official Bank Rate||0.50%||0.50%|
|GBP||Asset Purchase Facility||375B||375B|
|Tentative||GBP||MPC Rate Statement|
|17:15||USD||FOMC Member Brainard Speaks|
|17:30||USD||Natural Gas Storage||69B|
|20:01||USD||30-y Bond Auction||3.14|2.5|
|10-Jul||04:30||AUD||Home Loans m/m||-2.80%||1.00%|
|09:45||EUR||French Industrial Production m/m||0.50%||-0.90%|
|10th-13th||CNY||M2 Money Supply y/y||10.80%|
|11:00||EUR||Italian Industrial Production m/m||0.30%||-0.30%|
|GBP||Construction Output m/m||0.70%||-0.80%|
|17:00||USD||Wholesale Inventories m/m||0.30%||0.40%|
|19:30||USD||Fed Chair Yellen Speaks|
Currencies/Events to Watch this Week
RBA Monetary Policy & Jobs Report: The start of the new month see’s the RBA meet for its monthly monetary policy. Expectations are for the Central bank to keep interest rates steady at 2%. The Aussie has been relatively subdued since last month and a weaker pace of growth during the month could see the RBA strike a dovish tone in the markets. On tap is the June employment report from Australia and expectations are for the unemployment rate to increase by a notch to 6.1%.
Canada Jobs and Housing data: Last week was slow for the Canadian dollar with only the GDP data for the month being released. The week ahead will see some important data including the Ivey PMI and building permits. The Canadian jobs report is also due later on Friday and expectations are for the Canadian unemployment rate to increase to 6.9%, which could turn the sentiment even more bearish for the Canadian dollar.
Greece Referendum: There are quite a few economic releases from Eurozone next week but it is unlikely that the Single currency would react much to the data. Focus however will be how the Greece debt negotiations will continue after the Greeks voted ‘No’ to austerity. The Single currency is likely to come under increasing pressure in the near term.
BoE Rate Statement: The Bank of England has been quiet in recent months with economic data from the UK slowly turning higher. However, few weeks ago, Mark Carney ruled out rate hikes in the near term. The markets are pricing in a rate hike from the BoE in 2016, but that could change should the MPC members start to move to the hawkish camp. Overall, June’s BoE meeting minutes are unlikely to bring any major changes to the UK’s monetary policy.
FOMC Minutes & Yellen Speech: The week ahead will see more data from the US with the services and non-manufacturing PMI data on the tap. The markets could however shift focus to the FOMC meeting minutes due on the 8th of July (Wednesday) and follow up with Fed Chair, Janet Yellen’s speech on Friday.