The market is really heating up today as the recent Greek parliament vote has confirmed the current 'yes' mandate set out by Tspiras. I am a little surprised by the recent yes vote by the Greeks as it contains no haircuts to debt levels, which has been a serious issue going forward, as the IMF has painted it as a necessity in order for Greece to actually recover; current forecasts point to Greece taking 30 years to dig itself out of this hole.
Either way it all seems back to business in the Euro-zone for a change, after 5 years of painful problems and issues that constantly seem to arise. The long term question is will be if economic peace is restored to the Euro-zone or will Greece break down yet again and apply pressure on the European union. Either way equities will be positive on the back of this news and in the long term we could see more consistent bull runs.
The pound was the key mover today as the market was stunned by economic data that came out that showed that the unemployment rate had lifted to 5.6% compared to the expected 5.5%. Many are looking at this as a blip, but it may be a turning point for the UK economy. Either way the pound is currently testing strong resistance on a trend line which has been in play for a few months. 1.577 is likely to be the next level to feel further pressure as the pound climbs against the USD, if it's capable of further highs.
Gold has taken a beating on the charts as of late and has slid lower as risk appetite picks up across the globe in the wake of the ending of the Greek crisis. With a strengthening US economy it's not really a surprise, and support/resistance can be found at 1148.63. Support can also be found at 1139.82 and I would expect to see a solid test at least down to there, before we see some volatility and direction become apparent again. But, with a strong US economy coming through the woodwork we could soon see the bars taking a decent swipe at gold once and for all.
High flying kiwis were in for further disappointment as inflation numbers missed forecasts with CPI q/q coming in at 0.4%. It was still upbeat however compared to the previous month, but there is a shadow on the horizon which is going to hurt the NZ economy and that is milk prices at present. All forecasts so far have been lowered to $4.30/kg and this is likely to have a very strong effect on the export economy of New Zealand. So, with a sharp fall to 0.6566 we should expect to see further tests lower at this stage, with 0.6447 looking likely to be the next level of support.
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