Euro opened the week lower after the negotiation talk with Greece collapsed after just 45 minutes of meeting on Sunday. It's reported the European Union officials blamed the failure on Greece, which failed to offer anything new for securing the EUR 7.2b funding. A unnamed official was quoted describing the difference as an "ocean" instead of a "gap". It's believed that prime minister Alexis Tsipras refused to meet the demand on issues including pension cuts, tax hike and budget surplus target. Greece will need to repay EUR 1.6b to IMF by the end of the month. Some analysts noted that Greece could probably survive June and the biggest problem lies in July when it owes around EUR 3.5b in redemptions on bonds held by ECB. Eurozone financial ministers are expected to work on the issue on Thursday when they meet by there is little hope for a resolution so far. So far, weakness in Euro is limited as it's holding above near term support levels against other major currencies in general.
Elsewhere, UK Rightmove house price index rose 3.0% mom in June. Swiss will release PPI and retail sales in European session while Eurozone will release trade balance. The main focus is in US data to be released later in the day. Empire state manufacturing index is expected to rise to 3 in June. Industrial production is expected to rise 0.2% in May while capacity utilization is expected to rise to 78.3. NAHB housing market index is expected to rise to 56 in June. Canada will release manufacturing shipments.
Looking ahead, there are a number of central bank activities. FOMC statement, projections and press conference will be the major focus. Recent data from US were generally positive, pointing to a solid rebound in Q2. The revisions in economic projections will give much hints on how confidence the Fed is regarding the sustainability of the rebound. And, that such projections would start to have a notable impact on the rate path beyond the first hike. Meanwhile, the case of September hike would start to be solidified if one or two Fed hawks start to vote for rate hike in the meeting.
SNB and BoJ will also meet this week and both are expected to keep policies unchanged and could be non events. RBA will release minutes of its June meeting, when it held cash rate at a record low 2%. RBA governor Glenn Stevens noted last week that the central bank is open regarding further easing and markets will look for more information in the minutes. BoE will also release meeting minutes.
Here are some highlights for the week:
- Tuesday: RBA minutes; UK CPI and PPI; German ZEW; US housing starts and building permits
- Wednesday: Japan trade balance; UK jobs, BoE minutes; FOMC statement and projections
- Thursday: New Zealand GDP; SNB rate decision; UK retail sales; US CPI, jobless claims, Philly Fed survey
- Friday: BoJ policy statement; Canada CPI and retail dales