Forex news for Asia trading Monday 13 July 2015

Monday:

  • Greek official - Creditors' plan for privatization fund is deal breaker
  • Euro Summit still going - an all-nighter. Divisions over role of IMF, privatization fund
  • China Customs office comments on the trade balance - ... 'weak external demand'
  • China June Trade Balance CNY 284.2bn surplus (vs. expected 355bn )
  • China stock markets higher at the opening
  • UBS says AUD at fair value around US75c, further fall likely
  • Australia Credit card purchases A$23.5bn and balances $A51.3bn for May
  • BOJ meeting this week - expected to remain on hold, but watch the growth forecasts
  • Euro Summit to reconvene at 2am Brussels time
  • Euro Summit Statement ... 'Grexit' time-out said to be not mentioned in it
  • China Securities Journal: China should promote value investment in the stock market
  • New Zealand Food prices for June: +0.5% m/m (prior was +0.4%)
  • Did the IMF just ask that the Greek PM resign?
  • New Zealand House prices from REINZ, up 09% m/m and 5.6% y/y in June
  • Rumour - ECB said to agree on delay of bond payment by Greece due July 20
  • Moody's says China's sovereign credit rating to remain intact
  • BNP on Greece talks - Continued lack of clarity suggests modest risk-off sentiment
  • Trade ideas thread to start the new FX week - Monday 13 July 2015
  • Bloomberg: EU demands Tsipras's capitulation
  • Iran nuclear talks almost at goal, but could still fail - German govt source
  • Just waking up? Here's where we are at with the Greece negotiations
  • Update to FX Monday early prices
  • Monday morning opening FX prices - EUR lower to start the week
  • Iran says possible nuclear deal would not be announced Sunday
  • EUR/USD - FX very early Monday price indication

Weekend:

  • Tsipras to have talks with Merkel, Hollande and Tusk as Eurogroup offers Grexit-lite
  • Eurogroup says Greece needs financing of €82-86bln
  • Eurogroup give Greece until 15 July to pass new laws and conditions for ESM talks to start
  • EU's Moscovici says it's now up to Eurozone leaders to reach a Greek deal
  • Dijsselbloem says there some big issues still open as Eurogroup meeting ends
  • Tempers flare at eurogroup meeting on Greece; Draghi and Schaeuble square off
  • Iran says a nuclear deal is within reach today
  • EU's Moscovici still hopes for a good solution this afternoon
  • Greece: More comments from the Eurogroup as talks resume
  • EU leaders summit is cancelled as Eurogroup talks continue
  • Huge problems remain in Greek talks says Dijsselbloem
  • Dijsselbloem says it's "still very difficult" on Greece
  • Germany floats idea of Greek 'time out' from euro
  • Negative whispers at Iran nuclear talks
  • Points to remember when developing a forex trading strategy
  • Eurozone ministers give a soft 'thumbs down' to Greek proposal
  • Germany's Schaeuble says suggestions far from sufficient for Greek bailout
  • EU's Dombrovskis says "we are clearly making progress"
  • Merkel and Schaeuble squaring up again over Greece
  • Chinese stocks: When is a crash not a crash?
  • Troika says latest Greek plan may not be enough
  • Germany's Weber says the result of today's Eurogroup meeting is "completely open"T
  • EU and IMF tell the Eurogroup that Greek proposals are a basis for negotiation
  • Greek parliament approves government bailout proposal - more
  • Goldman Sachs: Case for EUR/USD downside is strong with or without Greece

The weekend kicked off with news from Athens that the Greek parliament had voted overwhelmingly in favour of sending off its proposals to Brussels, despite them being, on balance, tougher than the proposals rejected at the referendum the previous weekend. Oh well ... parliament voted in favour.

News flowed throughout the weeknd out of the Brussels meetings, first of the finance ministers and then of leaders.

As I update, the leaders meeting is still going, well after 5am in Brussels on Monday morning. At least we can be confident that any agreement reached after 50 coffees (or thereabouts) per participant and pulling an all-nighter will be a reasonable and carefully considered one. We can, can't we?

While I don't want to pre-empt any statement, what it looks like at this stage is (in very brief summary) .... Greece will be given until Wednesday (July 15) to enact reforms in their parliament including:

  • Cut pensions
  • Raise sales tax
  • Officials from Greece's creditors want full access to government ministers, and a veto over relevant legislation
  • A transfer of up to 50 billion euros of state assets to an independent Luxembourg-based company for sale (the Asset, or Privatisation Fund)
  • Greece to fire "workers hired in defiance of Greece's previous bailout commitments"

NOTE - It's the the Asset (or Privatisation) Fund that is the hardest sticking point as negotiations proceed.

  • Greece also wants a smaller role for the IMF in a post March 2016 3rd bailout program.

As I said, the meeting is ongoing and there is therefore no Statement as yet, these are my best guesses at what will be in it.

On the currencies - Monday opened early with a gap lower for EUR and other 'risk' currencies, and a gap higher for the yen.

The gaps were pretty much closed, though, as liquidity improved as more Asian centres came on line. Once this was done the ranges subdued somewhat.

AUD and NZD continued a little higher after their gap fill, AUD/USD through as high as near 0.7470, while NZD/USD topped around 0.6753.

Chinese stock markets gained a little during the session, the Shanghai Composite is up over 2% and Shenzen more than 4% as I update. Stock on suspension from trade fell, with around 400 shares reopening. this still left more than 1000 suspended, though.

Chinese trade balance data for June showed improved exports and a fall in imports. The fall in imports came in not as much as expected, though, by a big margin.

The other point of much interest over the weekend was the Iran nuclear talks. This failed to reach agreement, but there was some positivity expressed that agreement can be reached on Monday.

Oil prices gapped lower at the open and have not recovered.

Gold is more or less unchanged from Friday's close.