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    The Day Ahead - Thursday 16th July 2015

    Just when you thought it was safe to look forward to a bit of Greek stability, here we are again desperately waiting for a deadline to be met to get Greece out of a rather large hole.

    Unsurprisingly, given the nature of the agreement for the EUR86bn bailout package, which has been openly and publicly declared as being unfair by the Prime Minister, there is a lot of disagreement whether they should accept the terms both on the streets and in parliament.

    As parliament debates the terms and attempts to meet the deadline, which is approaching in around an hour, riot police are on the streets of Athens facing fire bombs thrown by anti-austerity campaigners. Whilst the Greek people are in disagreement over the plan, the IMF – on one Greece’s creditors seem to also be against the deal saying the ‘numbers do not add up’.

    The UK government is strongly against emergency funding coming from pools of funds the UK has contributed to. A treasury spokesman said “we are immovable on the principle that British taxpayers’ cash should not and will not be on the line in any Eurozone bailout” whilst yesterday George Osborne said the Eurozone should “foot their own bill.”

    Even if, as expected, the bailout terms do get accepted by Greece’s parliament that is not the end of it. It must get agreed to by other member states, with the German bundestag needing to agree on Friday where it is likely to face strong opposition.

    The Euro sits at 1.0950 against the US dollar having slipped about 60 pips over the course of Wednesday.

    Yesterday saw a swathe of data out of China with GDP, industrial production and retail sales all beating forecasts. GDP was at 7%, matching the April numbers whilst industrial production smashed expectations at 6.8% against a forecast of 6%.

    The UK saw disappointing jobs numbers with the average earnings index out at 3.% against a 3.3% expectation and unemployment rose to 5.6%, up from 5.5%.

    US PPI came in at 0.4%, beating the 0.2% forecast although down from a 0.5% release last time.

    Arguably the biggest news outside of Greece was in Canada where the overnight rate was slashed to 0.5% down 25 basis points. The news came as a surprise to the market sending USDCAD over 1 cent higher immediately on the release – and it has not retraced since. With demand in China slowing, damaging the value of exports and inflation sitting lower than desired, the Bank of Canada took the decision to try and stimulate the economy before the situation declines further.

    Following a large amount of news on Wednesday, Thursday is set to be quitter with New Zealand CPI leading us off at 01:45 GMT 3. The forecast is for a 0.5% increase compared to -0.3% last time.

    Outside of Greece, the US unemployment claims and Philly Fed manufacturing index at 15:30 and 17:00 will be the biggest indicators for USD traders to consider.


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