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    European Session – Markets subdued ahead of Greek referendum, US Independence Day holiday

    Market activity was subdued due to risk off ahead of key risk this weekend with the Greek referendum on Sunday. Greek Prime Minister Alexis Tsipras is urging Greek citizens to vote “no” to reject the austerity demanded by creditors in exchange for financial aid. Tsipras called the snap vote last weekend after negotiations with Greece’s creditors broke down.

    A “no” vote would create more volatility in the markets as it would mean unchartered territory since it would be extremely unclear what might happen following the result. However, the latest polls showed that support for the “no” camp has been declining from an initial 52% last weekend down to 43%today, while the “yes” side has gained and now stands at 42.5%. A yes vote could result in the Tsipras government being ousted.

    The euro gave up gains made in early European session trading when it reached a high of 1.1117 and slid to as low as 1.1078. The euro was briefly lifted after Eurozone retail sales rose more-than-expected by 0.2% in May versus 0.1 expected. Also the Eurozone Composite PMI beat forecasts to rise to 54.2 versus a 54.1 estimate.

    Sterling rose against the dollar after the UK services PMI rose more – than – expected in June to 58.5. This beat forecasts for a reading of 57.4 and was up from May’s 56.5. The data indicated that economic growth was picking up in Britain. The pound rose to 1.5642 after the data from 1.5618 before its release, before easing to 1.5601 as focus was back on risk.

    The dollar fell against the yen to increase Thursday’s post-nonfarm payrolls losses. US jobs data disappointed after non-farm payrolls rose a seasonally adjusted 223,000 in June versus an estimate of at least 230,000. Meanwhile, May’s 280,000 jump was revised lower to 254,000 jobs.

    Compared to Thursday’s high of 123.71 yen, the dollar was down to 122.66 yen today. The holiday in the US due to Independence Day coupled with the looming risk of the Greek referendum on the weekend will likely lead to light volumes for the rest of the day.

    Meanwhile, gold extended gains today due to safe haven demand and a weaker dollar and rose to as high as 1170.10.

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