Greece’s parliament is expected to vote on the austerity package later today (expected around 1200 GMT), with the implementation vote due tomorrow. Although there is still considerable uncertainty over the vote, markets expect it to pass and authorities are now trying to push for the private sector to finalise its participation plans. Overnight sentiment was hurt somewhat by talk of further China tightening but at this stage we believe most global central banks are in a more cautious mode. Continue reading →

The euro drifted off its highs but managed to hold on to most of yesterday’s gains ahead of the European session while risk appetite was fairly mixed. The S&P 500 closed up +0.9% on the day while the Nikkei was up +0.66% at the time of writing. EURUSD traded 1.4255-1.4330 and USDJPY 80.72-80.98. Continue reading →

The dollar has generally kept a bid tone overnight as markets remain wary ahead of further Eurozone event risk this week. The Greek parliament is due to vote on last week’s agreed austerity package on Wednesday/Thursday and many fear a repeat of last week’s politically-induced volatility. Despite some positive headlines both from within Greece and the Eurozone, as well as pledges of further Chinese support from Premier Wen Jiabao – who arrives in Berlin this week for talks – the lack of a comprehensive solution continues to undermine the currency. Continue reading →

Trading during the Asia session was subdued after a volatile Thursday. Asian equity markets are up and there are no fresh signs of risk aversion. The Eurozone managed to make a recovery late into the US session as Greece, the EU and the IMF announced that a new deal had been reached regarding further austerity. The news was welcome respite for risk appetite, which had a very difficult today post-Fed and further softening in US data. Even though there is still significant implementation risk for Athens – beginning with the austerity vote next week, markets are now relatively confident that the worst has passed for now. Continue reading →

The dollar found some consolidation in the wake of yesterday’s FOMC decision. The statement itself confirmed that QE3 will finish on schedule at the end of June, and Fed Chairman Bernanke cited inflation as a reason why further stimulus would not be forthcoming. The key policy language pledging to keep the policy rate “exceptionally low&for an extended period” was unchanged. Continue reading →

Greek Prime Minister Papandreou’s government has survived the confidence vote in the Greek parliament. The euro jumped 35 pips higher on the news, but settled back down again a few moments later. Risk appetite had already improved substantially ahead of the vote as investors correctly anticipated the outcome. EURUSD traded at 1.4346-1.4434, and USDJPY at 80.20-80.33. Continue reading →

Headline risk continues to prevail but admittedly yesterday’s comments from the Eurogroup and Ecofin meetings failed to provide any new information. The powers that be appear to be waiting for political risk in Greece to clear before making any fresh commitments, but other pan-Eurozone matters are steadily being resolved, and the news of EFSF lending capacity expansion was much welcomed. Continue reading →

The dollar strengthened broadly during the Asia session after a weekend meeting of Eurozone finance ministers ended, unsurprisingly, without substantive agreement on how to solve the Greek debt crisis. The statement issued afterwards even suggested that the disbursement of the next quarterly instalment may have to wait until mid-July. EURUSD traded at 1.4218-1.4301, and USDJPY at 80.03-80.25. Continue reading →

The euro weakened towards the end of the Asia session, having earlier found support after the IMF predicted a positive outcome from Monday’s meeting of Eurozone finance ministers. Nevertheless, uncertainty prevails over whether Greece will receive the next quarterly instalment of funds, and whether parliamentary approval of the new austerity measures is still a prerequisite. EURUSD recovered and traded at 1.4128-1.4222, while USDJPY traded at 80.49-80.76. Continue reading →

Ongoing political uncertainty in Greece and still no consensus with respect to a private sector involvement in a new bailout scheme is keeping demand for EUR-denominated assets low. Overnight, EURUSD traded 1.4191-1.4093 and USDJPY 81.93-80.85. Continue reading →

Although the dollar recovered some of yesterday’s losses against the euro, risk appetite was modestly supported after a solid performance by US equities. EURUSD traded 1.4404-1.4497, USDJPY 80.38-80.64. Continue reading →