Saturday July 18, 2015 - 10:02:12 GMT
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Greece Fading As Market Worry: Week Ahead
John M. Bland
Major Progress on Greece Debt Settlement
It took a several late night sessions, but major progress has been made in the Greek debt negotiations. Initially, EU leaders came to an agreement on a new austerity program, and then very late on Wednesday the Greek Parliament approved the accord on a split vote by the majority Syriza majority Party. The plan still has to be approved by a number of individual European governments and Parliaments, so there is still a slight risk that the deal might not go through. In the meantime, markets are operating under the assumption that the deal will close with no hitches. So Greece will remain in the Eurozone for now and funds will be released to allow Greek banks to reopen by Monday and for payments to be made to keep its payment status current.
Forex Market Developments
The latest week has seen some forward guidance on monetary policy by the U.S. Fed and the Bank of England. Fed Chair Yellen clearly indicated that a rate hike is probable before year end. BOE Governor Carney was not specific on timing but warned the markets that the central bank is moving in the direction of a tightening. Both assured the markets that any future tightening would be gradual. As for forex trading, the Greece settlement is seen as a weight on the EUR as it loses its safe-haven status and resumes the role of the primary carry trade funding currency.
The upcoming week is an slow period one for major economic data.
-- Monday, July 20, Holiday for Japan.
-- Tuesday July 21, No major releases.
-- Wednesday July 22, Quarterly Australian CPI data and the most recent Bank of England Policy Board Meeting Minutes.
-- Thursday July 23, U.K. and Canadian Retail Sales data. Additionally a Eurozone Consumer Confidence reading and U.S. Leading Indicators are due.
-- Friday July 24, a slew of flash Manufacturing and Service PMIs from all over the globe. U.S. New Homes Sales.
Be sure to refer daily Global-View to see the continuously UPDATED Economic Calendar and the Forex Forum for the complete list of key items (actual data, selected charts, etc.) as they are released.
John M. Bland
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