Global Markets:
- Asian stock markets: Nikkei up 1.40 %, Shanghai Composite fell 3.20 %, Hang Seng declined 1.10 %; ASX rose 1.55 %
- Commodities: Gold at $1166 (-0.60 %), Silver at $15.63 (-0.75 %), WTI OIl at $53.06 (+1.00 %), Brent Oil at $57.20 (+0.70 %)
- Rates: US 10 year yield at 2.30, UK 10 year yield at 2.01, German 10 year yield at 0.76
News & Data:
- Reserve Bank of Australia Interest Rate Decision 2.00 %, Expected: 2.00 %, Previous: 2.00 %
- RBA: global financial conditions remain very accommodative
- RBA: AUS economy likely to be operating with a degree of spare capacity for some time yet
- RBA: inflation is forecast to remain consistent with target over next one to two years, even with lower exchange rate
- RBA: AUD has declined noticeably against USD over past year, but less against basket of currencies
- RBA: Further AUD depreciation both likely and necessary
- New Zealand NZIER Business Confidence 5.0 %, Previous: 23.0 %
- ECB’s Nowotny: Greek Referendum Hasn’t Facilitated Negotiations — BBG
- Iran and world powers agree on 4 of 5 annexes for the nuclear accord, agree on main text, talks continue
- Japanese Gov’t Advisor Hamada: BoJ Doesn’t Need To Add Stimulus Now, Yen May Weaken On MonPol Divergence — BBG
Markets Update:
Overnight, the main event was the RBA rate decision. The central bank left the key rate unchanged at 2.00 % and said that accommodative monetary policy will remain appropriate in the near-term. They think that AUD will further depreciate, noting that while the currency has declined noticeably against the US Dollar, it hasn’t much against a basket of currencies. Overall, nothing new from the RBA.
Chinese stock markets had again a volatile session. The government is trying to calm the markets down, but it is unlikely to succeed as traders and investors seem to be in a panic mode. Meanwhile, Greece remains the hot topic in the currency markets. While the reaction to the referendum has been surprisingly calm, traders continue to watch the developments there as a Grexit seems increasingly likely. There is a Eurogroup meeting scheduled this morning, as well as a Euro Summit in the evening. In terms of data releases, the key events will be UK industrial & manufacturing data at 0930 BST and Canadian trade data at 1330 BST.
Upcoming Events:
- 06:45 BST – Swiss Unemployment Rate
- 07:00 BST – German Industrial Production
- 09:30 BST – UK Industrial Production
- 09:30 BST – UK Manufacturing Production
- 11:00 BST – Eurogroup Meeting
- 13:30 BST – US Trade Balance
- 13:30 BST – Canadian Trade Balance
- 15:00 BST – UK NIESR GDP Estimate
- 15:00 BST – US JOLTs Job Openings
- 17:00 BST – Euro Summit
