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Greeks Dissolve Parliament

Tsipras Submits Resignation and Calls Snap Elections

After months of battling members within his own party, Greek Prime Minister Alexis Tsipras has submitted his resignation to the Greek President, paving the way for elections to be held on September 20th.  This comes amid creditors unlocking a new bailout package for the Greek economy following the passage of measures in regional Euro Area Parliaments.  The ECB was repaid earlier this week and more importantly, the bailout measures provide funds to help recapitalize banks that saw a substantial loss in confidence following months of capital controls that bled reserves.  Tsipras is hoping that he will be able to remove certain members from his party after backtracking on election promises which angered certain members.  The Euro continues to benefit from the perceived stability, rallying higher in the prior few sessions but retreating modestly overnight.

 

 

 

 

Chinese policymakers continue to play a game of whack-a-mole with the economy as solutions to one problem end up creating new problems in other areas.  The latest Chinese Flash Manufacturing PMI showed that industrial production slumped to its worst level in years as weakness spreads through the export economy. Even with all the massive stimulus efforts undertaken by the People’s Bank of China, confidence in the economy continues to crumble as evidenced by worsening economic fundamentals and shaky financial markets.  The Central Bank revalued the Yuan higher overnight, in the biggest two-day strengthening in approximately four months, however the PMI overshadowed other actions as equities continue to suffer from further drops as the Hang Seng and other regional equity benchmarks reentered bear market territory.

 

 

The US housing market continues to surprise analyst expectations with the latest existing home sales numbers beating estimates of a contraction by a wide margin. Although the positive from a headline perspective, the fact that the number was seasonally adjusted and revised calls into question the veracity of the data and how accurately it reflects the actual situation in the housing economy.  The unexpected uptick in the Philadelphia Fed Manufacturing Index also caught market participants off-guard, but remained unable to shift sentiment in the dollar and equities which have extended their recent losing streak.  The worsening Chinese outlook continues to impact policymakers’ maneuverability which is raising fears that the Federal Reserve might not be able to raise rates in 2015.  Equity benchmarks lost broadly during the cash session with futures extending losses following the Chinese PMI, led lower by the Nasdaq Composite.

 

 

Economic Calendar

 

Time

 

 

Currency

 

 

Event

 

 

Forecast

 

 

Previous

 

 

09:00 GMT

 

 

EUR

 

 

Manufacturing PMI

 

 

52.2

 

 

52.4

 

 

09:00 GMT

 

 

EUR

 

 

Services PMI

 

 

54.0

 

 

54.0

 

 

13:30 GMT

 

 

CAD

 

 

Core CPI (MoM)

 

 

0.00%

 

 

0.00%

 

 

13:30 GMT

 

 

CAD

 

 

Core CPI (YoY)

 

 

2.40%

 

 

2.30%

 

 

13:30 GMT

 

 

CAD

 

 

Core Retail Sales (MoM)

 

 

0.50%

 

 

0.90%

 

 

13:30 GMT

 

 

CAD

 

 

Retail Sales (MoM)

 

 

0.30%

 

 

0.20%

 

 

14:45 GMT

 

 

USD

 

 

Manufacturing PMI

 

 

54.0

 

 

53.8

 

 

 
 

Copper Downward Channel Trading Opportunity

 
Prices of input commodities continue to tumble as the outlook for Chinese manufacturing continues to dent prospects of a price recovery for industrial metals including iron ore and copper.  In a sector of the commodity universe that is plagued by oversupply and overproduction, the recent weakness in prices might be extended as the outlook for global trade worsens on slowing decelerating momentum and already burgeoning stockpiles.  Copper prices are currently in the process of trending to the downside back towards multi-year lows after a quick bounce following the recent rout in prices failed to materialize.  The downward channel pattern has a predominantly bearish bias with the optimal short positions taken from the upper channel line targeting the lower channel line.  A move above the upper channel line could be indicative of a channel-based breakout to the upside to be accompanied by additional volume and momentum higher.
 
 
 
Resistance: 2.282/2.289
Support: 2.270/2.265
 


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