It’s not very often that US nonfarm payrolls get overshadowed by something else but that’s been the big story in US trading today. US payrolls rose by a respectable 223K, in the middle of the 200-250K Goldilicks zone not too hot to force the Fed to raise rates but not too cold to suggest a weak economy that could hit corporate earnings. More important, however, was the big downward revision to last month’s report. With the risk to the global financial system from a possible default by Greece or more significantly for the US, Puerto Rico already having traders wondering if a shock could stop the Fed from raising rates this summer, soft data adds to the case for holding off. This news sent USD lower, enabling gold and many of the major currencies to rebound, particularly CHF and EUR. US stocks started the day out higher as well but steadily dropped back and finished the day in the red. It appears traders were reluctant to take on any new positions ahead of tomorrow’s holiday and the long weekend ahead of Sunday’s Greece referendum. Negotiations appear to have ground to a standstill with everyone awaiting the results of Sunday’s vote. The IMF released a report indicating that Greece would need €50 billion in funding over the next three years and significant debt relief. Polls suggest the Yes side running about 47% and the No side running about 43% so really it looks too close to call at this point. Because of the uncertainty over which way the Greek people will vote and confusion over what a result would mean anyway, markets could be quite volatile to start news week just like they were this week. Although there’s a lot of news out today from Asia Pacific and European countries, particularly service PMI and some retail sales reports, we could see Greece uncertainty loom large over all markets through the end of the week keeping some traders on the sidelines and potentially pushing others toward them. Chinese stock markets could also be active today. There have been a number of reports and rumours floating around over what exchanges, securities regulators, the PBOC and other government parties could do to shore up confidence in the markets following the rocket ride and abrupt retreat of recent months. Both Hong Kong and Shanghai markets may remain volatile while traders continue to work out the new market reality and try to find a point of equilibrium between bulls and bears. Corporate News There have been no major corporate reports after the US close today. Economic News Significant announcements released overnight include: Singapore PMI 50.4 vs street 50.2 Singapore Electronics sector 50.3 vs previous 49.8 US nonfarm payrolls 223K vs street 233K US nonfarm payrolls revision May cut to 254K from 280K US unemployment rate 5.3% vs street 5.4% US participation rate 62.6% vs street 62.9% US average hourly earnings 2.0% vs street 2.3% US jobless claims 281K vs street 270K US factory orders (1.0%) vs street (0.5%) US natural gas 69 BCF vs street 71 BCF US Baker Hughes drill rig count 862 vs previous 859 Canada manufacturing PMI 51.3 vs previous 49.8 Sweden interest rate surprise 0.10% cut to (0.35%) UK Nationwide house prices 3.3% vs street 4.5% UK construction PMI 58.1 vs street 56.5 Spain unemployment change (94K) vs street (125K) Upcoming significant announcements include: 11:30 am AEST Australia retail sales street 0.5% 8:30 am BST Sweden industrial production street 2.5% 9:00 am BST Norway unemployment rate street 2.8% 10:00 am BST Eurozone retail sales street 2.3% Service PMI Reports: 9:30 am AEST Australia previous 49.6 11:35 am AEST Japan previous 51.5 11:45 am AEST China HSBC previous 53.5 3:00 pm AEST India previous 49.6 7:30 am BST Sweden previous 58.2 8:15 am BST Spain street 58.4 8:45 am BST Italy street 52.3 8:50 am BST France street 54.1 8:55 am BST Germany street 54.2 9:00 am BST Eurozone street 54.4 9:30 am BST UK street 57.5 9:00 am EDT Brazil previous 42.9 CMC Markets is an execution only service provider. The material (whether or not it states any opinions) is for general information purposes only, and does not take into account your personal circumstances or objectives. Nothing in this material is (or should be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by CMC Markets or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.
Greece still overhanging markets heading into Sunday’s big vote
02:00, 02 juli 2015