The debt issue on Greece remains a big question mark for the markets. Despite previous high-level discussions on the issue, several officials expressed uncertainty. IMF’s Lagarde had said, “there’s enormous work†that still needs to be done. Various Eurogroup meetings happened throughout the week, but ultimately no deal was reached between the Greek government and top officials involved. Banks in Greece are closed (small cash withdrawals allowed) and would stay so until July 6, or until officials take drastic steps to end the stalemate. The Greek government imposed the bank restrictions in order to “protect the financial systemâ€. German Chancellor Angela Merkel expressed willingness for further talks with Greece’s Prime Minister Alexis Tsipras “if he actually wants to”. The Greek PM has called for a referendum on July 5 to discuss the terms offered by the creditors, and request for a bailout extension.
All Flash Manufacturing PMI and Flash Services PMI from Germany, France, and the Eurozone came in better than forecast, unlike in the previous instances.
Germany’s Ifo Business Climate fell to its lowest in the last four months to 107.4 as the Greek risk weighs down on business confidence.
In the United States, the National Association of Realtors reported that Existing Home Sales came in slightly better at 5.35 million May, its best level since November 2009. Unemployment Claims was spot on at 271,000. Personal Spending for May edged up 0.9 percent, while Personal Income matched the previous month with a 0.5 percent increase. Meanwhile, the Revised University of Michigan Consumer Sentiment surged to a five-month high of 96.1 in June, due to improving labor market outlook.
Commodities
Gold continues to have problems breaking through the $1,200 level. Therefore, last week’s warning about the vulnerability of the lower part of $1,100 remains.
Not much has changed in oil as it ping-ponged between $58 and $62 this week. Long-term downtrend remains intact. A move below $56 would ignite further weakness.
Currency Pairs
The break of 1.1300 and 1.1200 speaks volumes about EURUSD’s possibility in moving lower after this week. This eventuality would test the strength of possible support area around 1.08 to 1.10.
Like EURUSD, GBPUSD suffered a bearish week after the 1.5900 level formed a layer of defense from buyers and stuck with this defense throughout the week. Immediate support would come into play around 1.5600-60, if bears are interested to head that way.
USDJPY seems magnetized by the 124 level but somehow it found its way back down to 123 all throughout the week. Sellers might grow impatient and try to push this pair down toward 120 again.
 The Week Ahead
Monday’s news activity will kick off early starting with Japan’s Retail Sales and Prelim Industrial Production, followed by Germany’s Prelim CPI; Spain’s Flash CP; UK Net Lending to Individuals; Canada’s RPMI and IPPI; and US Pending Home Sales.
On Tuesday, news activity will pick up, with New Zealand’s Building Consents; Japan’s Average Cash Earnings; Australia’s Private Sector Credit and ANZ Business Confidence; Germany’s Retail Sales and Unemployment Change; Switzerland KOF Economic Barometer; UK Final GDP and Current Account; Eurozone Jobless Rate and CPI Flash Estimate; Canada’s GDP; and US Chicago PMI and CB Consumer Confidence.
Wednesday will have Australia’s Building Approvals; Japan’s Tankan indices; China’s Manufacturing PMI and HSBC Manufacturing PMI; Spain, Italy, Germany, UK, France and Eurozone Manufacturing PMI; UK BOE Financial Stability Report; and US ADP Non-Farm Employment Change and ISM Manufacturing PMI. Canada will observe Canada Day.
Thursday will have Australia’s Trade Balance; Spain’s Unemployment Change; UK Halifax HPI and Construction PMI; ECB Monetary Policy Meeting Accounts; US Non-Farm Employment Change, Jobless Rate, Factory Orders, and Jobless Claims.
Friday’s activity will be brief with Australia’s Retail Sales; China’s HSBC Services PMI; Spain, Italy, France, Germany, UK, and Eurozone Services PMI; Eurozone Retail Sales. The US will observe Independence Day.
