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    The Day Ahead - Wednesday 1st July 2015


    So Greece decided to have one last go of making their IMF payment by effectively begging for an extension to the current bailout and a new two year rescue package.

    Eurozone financial heads flatly refused the request with Dutch minister Dijsselbloem saying it would be “crazy” to extend the terms given the fact Athens was still rejecting the proposals put forward. Angela Merkel said there should be no further talks before the weekend referendum. Missing the IMF payment is not something which is going to cause an all-out collapse of the Greek economy, but the tension will increase. No developed government has ever missed a repayment to the IMF.

    So with these developments, what happened to the Euro? Not much is the simple answer. EURUSD sits at 1.1140 right now only 20 pips lower than it closed on Friday.
    Outside of the Eurozone talks we saw British Current Account figures miss expectations and was released at -26.5B against the -23.7B forecast although this was an improvement on the previous month.

    Canadian GDP was released for the month showing a negative 0.1 per cent figure against the positive 0.1% that was expected. This saw the USDCAD pair rise sharply by over 40 pips in a minute as the data showed it was the fourth month in a row where GDP missed expectations.

    Some positive news came out of the US with consumer confidence at its highest level since January at 11.4 against the forecast 97.1.

    Today we see China Manufacturing PMI released, which is forecasted to be at 50.5, at 04:00 GMT 3. This differs from the HSBC flash PMI and typically shows a higher number. Above 50 indicates expansion, although these numbers are disputed by some as being influenced by the Government. The HSBC number is released 45 minutes later and the forecast is 49.6 which would show a contraction.

    Next we have Australian Building Approvals at 04:30. This figure has a recent history of coming out well away from the expected release. Last month was -4.4 against -1.7 and this month is forecast to be 1.2%. Typically the bigger the number, the better for the Aussie.

    Once Europe gets going, along with the Eurogroup meetings we have Manufacturing PMI affecting the GBP at 11:30 before Gov Carney speaks at 12:30. At 15:15 the ADP Non-Farm employment change figures are released and finally we see the US ISM Manufacturing PMI at 17:00. This is forecast to be 53.2 against last month’s 52.8.

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