Commodity Currencies Soar on Risk Appetite

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Mid-Day Report: Commodity Currencies Soar on Risk Appetite

Commodity currencies are all strong today as boosted by recovery in global risk appetite on optimism that Greece would avoid an immediate default. Data from Canada maintains a firm tone in the loonie. Canadian GDP avoided a contraction in May and was flat m/m. Crude oil is staying firm around 95 level for the moment and helps support the loonie, which will likely extend the CPI triggered rally against dollar in near term. This week's data fuel speculation that while BoC would likely be on hold in Q3, it may restart tightening in Q4.

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Featured Technical Report

USD/CAD Mid-Day Outlook

Daily Pivots: (S1) 0.9650; (P) 0.9737; (R1) 0.9785; More.

USD/CAD's decline is still in progress and reaches as low as 0.9653 so far in early US session. Intraday bias remains on the downside with 0.9714 minor resistance intact. As noted before, , rebound from 0.9444 low should have completed at 0.9912 already. Further decline is now expected to retest 0.9444 low next. On the upside, above 0.9714 minor resistance will turn bias neutral and bring consolidations. But recovery should bel limited below 0.9912 resistance and bring fall resumption.

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Economic Indicators Update

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GMT Ccy Events Actual Consensus Previous Revised
22:45 NZD Building Permits M/M May 2.20% 3.20% -1.60% -1.20%
23:01 GBP GfK Consumer Sentiments Jun -25 -24 -21
23:15 JPY Nomura/JMMA Manufacturing PMI Jun 50.7
51.3
01:00 NZD NBNZ Business Confidence Jun 46.5
38.3
05:00 JPY Housing Starts Y/Y May 6.40% 3.10% 0.30%
07:55 EUR German Unemployment Change Jun -8K -17K -8K
07:55 EUR German Unemployment Rate Jun 7.00% 7.00% 7.00%
08:00 EUR Eurozone M3 Y/Y May 2.40% 2.10% 2.00%
09:00 EUR Eurozone CPI Estimate Y/Y Jun 2.70% 2.80% 2.70%
12:30 USD Initial Jobless Claims 428K 420K 429K
12:30 CAD GDP M/M May 0.00% -0.10% 0.30%
13:45 USD Chicago PMI Jun
54 56.6
14:30 USD Natural Gas Storage
80B 98B
Forex Trade Ideas

Trade Idea Update: EUR/USD – Buy at 1.4350

Despite intra-day marginal rise to 1.4522, as the currency pair has retreated on the back of intra-day selloff in cable, suggesting consolidation below said resistance would take place and pullback to the Kijun-Sen (now at 1.4426) cannot be ruled out, however, downside should be limited to the Ichimoku cloud top (now at 1.4365) and support at 1.4320 should hold, bring another rise later.

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Trade Idea: AUD/USD – Buy at 1.0605

This week’s rally from 1.0390 signals the a-b-c correction from 1.1012 top has ended there and consolidation with upside bias is seen for test of previous resistance at 1.0775 (wave b top), however, a sustained breach above there is needed to add credence to this view and extend gain to 1.1820/30 but break of previous resistance at 1.0889 is needed to signal upmove has resumed.

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Candlesticks Intraday Trade Ideas Update Schedule (GMT):
1st Update: 0630 - 0700; 2nd Update: 0930 - 1000; 3rd Update: 1230 - 1300; 4th Update: 1500 - 1530
Pairs Covered: EUR/USD, USD/JPY, GBP/USD, USD/CHF

Elliott Wave Daily Trade Ideas Update Schedule (GMT):
AUD/USD, EUR/JPY: 0800 - 0830; EUR/GBP, USD/CAD: 1330 - 1400

Suggested Readings

Fundamental Highlights

Technical Highlights


Eurozone Annual Inflation Steady At 2.7% In June


Link to ForexLive

Belgian FinMin Reynders: July 3 eurogroup meeting will agree release of next tranche of loans for Greece

Posted:

Officials have seen some progress on private sector involvement on Greek debt Sees a clear willingness to consider France’s Greek debt rollover plan in Belgium and Germany Does not expect a Eurogroup agreement on July 3 on private sector involvement

BOE: Squeeze Expected In UK Corporate, Household Credit

Posted:

LONDON (MNI) – Weak lending figures are tipped to worsen further in the months ahead, with a squeeze expected in corporate and household credit availability, the latest BOE Credit Conditions Survey shows. The BOE survey shows that the availability of credit to households has been growing slowly so far in 2011, and it is expected [...]

Cable bids sub 1.6000

Posted:

Hearing talk of retail bids sitting just under 1.6000, from the same mob who sold it above 1.6100 in early Europe and Asia Cable’s at 1.6004

Analysis: Eurozone Annual Inflation Steady At 2.7% In June

Posted:

June flash: +2.7% y/y MNI survey median: +2.8% y/y MNI survey range: +2.7% to +2.9% y/y May: +2.7% y/y — FRANKFURT (MNI) – Consumer price inflation in the Eurozone was steady at an annual rate of 2.7% in June, Eurostat reported on Thursday, citing preliminary estimates. The majority of analysts polled had expected a mild [...]

ITALY DATA: Preliminary June HICP rose 0.1% m/m, as..

Posted:

ITALY DATA: Preliminary June HICP rose 0.1% m/m, 3.0% y/y, same as 3.0% y/y in May, and posting the highest y/y gain since October 2008 (+3.8%). –The preliminary main domestic index (NIC) rose 0.1% m/m and 2.7% y/y, rising from 2.6% y/y in May. –Core NIC Inflation accelerates to 2.1% y/y, up from 1.8 y/y [...]

EMU DATA: Eurozone annual inflation held firm at in..

Posted:

EMU DATA: Eurozone annual inflation held firm at +2.7% in June, Eurostat reported on Thursday, citing preliminary figures. – For more information, please see MNI Mainwire

Euro zone June inflation estimated at +2.7% y/y

Posted:

Versus median forecast of +2.8%.

Trichet: Asked if there is a plan B for euro zone…..

Posted:

Says we are called to be highly responsible We are permanently alert Will continue to strictly seperate standard measures and non-standard measures Believe a special tax on financial transactions in Europe along would lead to massive loss of activity in Europe Right I’ve had enough of Jean Claude……

Re that Goldman AUD/JPY call…..

Posted:

Zerohedge. I’m saying nuffink. Don’t want to mess up my chances of a job……

EMU M3 Growth Accelerated Sharply In May; Private Loans Up

Posted:

May sa M3: +2.4% y/y M3 sa 3-mo avg: +2.2% y/y SA private loans: +2.7% y/y MNI survey median: May sa M3: +2.1% y/y M3 sa 3-mo avg: +2.2% y/y SA private loans: +2.7% y/y MNI survey range: April sa M3: +1.8% to +2.4% y/y M3 sa 3-mo avg: +2.1% to +2.2% y/y SA private [...]

Cable having a nightmare

Posted:

Has given up a full cent so far this morning, presently down at 1.6010. Not helped by Buba doing it’s usual month end EUR/GBP buying. A US investment bank (not the one doing God’s work) is said to have been selling aggressively from about the 1.6070 level . The bank in question has also been active [...]

EUR/GBP firmer as Buba buys

Posted:

Bundesbank has been in doing its’ usual month end EUR/GBP buying. UK clearer notable buyer too. Cross up at .9035 from early .9010.

New BOJ board member Ishida: Higher uncertainty for overseas economy than earlier this year

Posted:

BOJ should avoid underwriting of govt bonds See Japan’s economic recovery gaining momentum towards summer BOJ’s underwriting of govt bonds would hurt companies’ global competitiveness through ratings downgrade Japan economy likely to benefit from overseas growth if it exceeds Japans

Germany’s Jobless Down Less Than Expected In June

Posted:

SA Unemployment: -8k (pan-German), -10k (West), +2k (East) MNI survey median: -16k m/m MNI survey range: -30k to -5k m/m – FRANKFURT (MNI) – The ranks of the unemployed in Germany declined less than generally expected in June, as a rebound in the eastern states partially offset a further fall in the west, the Federal [...]

GERMANY DATA: June sa unemployment -8k (MNI median…

Posted:

GERMANY DATA: June sa unemployment -8k (MNI median -16k): Federal Labour Office. – Germany June sa unemployment rate 7.0% (MNI median 7.0%) – Germany June sa job vacancies +2k vs May +2k – Germany June nsa unemployment rate 6.9% vs May 7.0% – Germany June nsa unemployment 2.893 mln vs May 2.96 mln – *!Germany [...]

German June s.a jobless -8k to 2.967 mln

Posted:

Not quite as good as median forecast of -17k. Unemployment rate unchanged at 7.0%, as expected. EUR/USD back below 1.4500 in slow, indecisive, trade. Asian sovereign seller noted in recent trade. Presently at 1.4488.

ECB Text: ECB Trichet’s Intro Statement Before EU Parliament

Posted:

FRANKFURT (MNI) – The following is the verbatim text of European Central Bank President Jean-Claude Trichet’s introductory statement at the Quarterly Hearing before the Committee on Economic and Monetary Affairs of the European Parliament on Thursday: It is a pleasure to be back in Parliament and your Committee for our regular exchange of views. Once [...]

Trichet: Have seen higher than expected growth quarter after quarter in euro zone, euro has kept value

Posted:

China looking at how to best optimise their investments, but no comment on interest in euro Involving private sector in Greece debt deal more complex than you think We need programmes that will convince investors and strongly supported by country itself We are observing a correction of debt imbalances If sovereigns have problems, then banks [...]

France Budget Min: Doing Everything To Save Greece, Eurozone

Posted:

PARIS (MNI) – France’s new budget minister, Valerie Pecresse, said Thursday that rescuing Greece and preserving the euro remained a top priority at the European level and that fiscal consolidation would continue to guide domestic policy. Previously minister for research and higher education, Pecresse takes over for Francois Baroin, who was appointed Wednesday to succeed [...]

Trichet: Recent data confirm positive underlying momentum in euro zone economy

Posted:

In purdah period, comments not intended to reflect monetary policy decision at July meeting Upside inflation risks in particular from energy prices Essential recent rise in inflation does not give rise to broad-based inflationary pressure Risks to medium-term inflation outlook are on upside Liquidity ample, could feed inflation pressures Current monetary policy is accomodative Strong [...]