Dollar Firm As Focus Turns From Greece To NFP

Dollar is firm in Asian session as markets' focus turns temporarily away from Greece to job data from US. Non-farm payroll is expected to show 225k growth in June while unemployment rate is expected to drop to 5.4%. Average hourly earnings are expected to rise 0.2% mom. Leading data for NFP were generally positive. The ADP report showed 237k growth in private sector jobs in the same month, up from prior 203k and beat expectation 211k. The four week moving average of initial claims dropped slightly 1k to 274k on June 20 versus May 30's 275k. The employment component of ISM manufacturing showed impressive improvement to 55.5, up from 51.7. That's also the highest reading this year. Conference Board consumer confidence rose to 101.4, matching the second highest reading this year in March. So overall, the data suggests that we'd likely have a positive NFP reading today which would be dollar supportive. The wild card is in the wage growth figure which might propel the greenback higher in case of up side surprise.

Regarding the situation in Greece, Eurogroup chairman Jeroen Dijsellbloem said that prime minister Alexis Tsipras' letter was noted. But, "given the political situation, the rejection of the previous proposals, the referendum which will take place on Sunday, and the recommendation by the Greek government to vote 'no,' we see no grounds for further talks at this point." Regarding Tsipras' proposal, German finance minister Wolfgang Schauble said that it "did not provide further clarity" and that was "no basis" for resuming the negotiation before the referendum. French president Francois Hollande, on the hand hand, said that "if we have to wait for a referendum, there is always a risk . . . that we would enter a period of turmoil and enter into the unknown," and "it's better to be sure than to leap into the void."

Elsewhere, Japan monetary base rose 34.2% yoy in June. Australia trade deficit narrowed to AUD -2.75b in May. In European session, UK will release nationwide house price and construction PMI. Eurozone will release PPI. Other than NFP, US will release jobless claims and factory orders.