“Greadlines” dominate data (video)

Currencies Direct June 30th 2015 - 2 minute read

After jumping lower at the market open yesterday (29 June), the euro has already made up for most of its losses. This has happened despite the EU ratcheting up the pressure on the Greek government by suggesting the referendum is effectively an in-out vote on the euro.
 
Last night, Greek PM Alexis Tsipras risked his already precarious position by urging Greek voters to reject the bailout terms by backing the no vote. However, the market seems to be behaving as though a Grexit would be manageable through the various measures put in place since the financial crisis.
 
Greek banks will remain shut until after the votes in the 5 July referendum are counted. Expect volatility to continue as polls about the likely outcome start to emerge. Greece looks set to miss its repayment to the International Monetary Fund today, so that will also give the euro a bumpy ride. Perhaps, instead of the Grexit, we should be talking about “Greadlines”.
 
Greece is not the only word
 
We also have German unemployment data due this morning (30 June), which is forecast to show the jobless rate remaining at 6.4%. Later today, Eurozone-wide CPI data is expected to confirm that inflation remains positive.
 
UK consumer confidence reached its highest level since the 1990s, according to data released last night. UK shoppers are enjoying a post-election bounce, which fits in with the recent narrative from the Monetary Policy Committee. The MPC indicated that it expects a pick-up in UK data flow as we move towards Q3. In normal market conditions the news would be enough to drive a Sterling rally, but developments in Europe mean that normal market conditions don’t apply.
 
Following hot on the heels of the UK’s data releases, US consumer confidence data is released later today and is expected to paint a similar, if not quite as exuberant picture, as on this side of the Atlantic. The index of sentiment is forecast to rise to 97.1, the highest level since February.

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