Despite the continued unrest in Greece, and the official default of the Greek payments to the IMF the Euro remained solid perhaps showing traders are predominantly waiting for the referendum on Sunday to generate a true direction.
As Greece became the latest member of a very small group of countries to be in arrears to the IMF alongside economic minors Sudan, Somalia and Zimbabwe, once again Prime Minister Tsipras put new proposals to the ‘Troika’ of creditors in order to reach an agreement. This was rejected out of hand with Dutch Finance Minister Dijsselbloem saying a new bailout could only be discussed “after and on the basis of the outcome” of Sunday’s referendum.
Currently 54% are in favour of a ‘No’ vote, rejecting the recent proposals, according to polls as support for the ‘Yes’ side ramps up as capital controls and a lack of cash begin to bit hard into the daily living of many across Greece. The PM went on TV to give a speech thanking the Greek people for their calm and also denied that he had a secret plan to take Greece out of the Euro. The official position of the Hellenic Republic still appears to involve staying in the Euro, but only on their terms.
Wednesday also saw a number of key economic indicators starting with Chinese Manufacturing PMI. Once again, the official government numbers came out above 50, showing expansion at 50.2 but the HSBC numbers 45 minutes later disagreed with a release of 49.4 both missing the 49.6 forecast and also showing contraction in the industry. HSBC has just allowed the sponsorship of this release to lapse amid alleged concerns that showing disagreement with the government of China has the potential to be bad for business.
Australian building approvals came out well above forecast at 2.4%, but as highlighted in yesterday’s preview, these figures have a knack of being poorly forecasted. British manufacturing PMI missed estimates, coming in at 51.4 against 52.6. Whilst still expanding, the recent releases over the last three months appear to show expansion at a slower rate.
Bank of England Gov. Carney spoke, saying that whilst the UK has a minimal direct exposure to Greece, the overall outlook for financial stability has worsened due mostly to the willingness of businesses to take risks.
Later in the day, US ADP Non-farm employment figures came out ahead of expectations sending the USD higher, although these numbers only act as a teaser to the main event. This week non-farm payrolls in the US are released on Thursday as Friday sees the start of the US Independence Day holiday weekend. The number will be released at 15:30 GMT 3, forecast for 231k, with a number above that likely to send the dollar higher going into the 4th July weekend.
This morning however, we have Aussie trade balance at 04:30 (11:30 local time) with the forecast at -2.21B. Last month showed a lower number than had been seen for a number of years, so economic watchers may be looking for signs that it was an anomalous figure.