Daily Market Review for July 7, 2015
The Clock is Ticking for Greece
Just as it was yesterday the markets will actively react on any news around the Greek deadlock. The Eurogroup Summit on Greek Referendum is scheduled today at 11:00 GMT.
It appears that the United States and the IMF are ready to resolve the impasse. The White House called on Greece to deliver on its previous commitments to overhaul its economy. On the other hand White House press secretary Josh Earnest said Athens’ creditors must also ensure the country’s debt is sustainable to reach a deal that keeps the nation in the eurozone.
“It will require both a package of financing and reforms that will allow Greece to achieve, or at least be on a path towards some debt sustainability,” Josh Earnest said.
“But it is also important for Greece to implement the kinds of reforms and to keep the commitments that they’ve made previously,” he said.
Moreover, the IMF officials expressed its readiness to help Greece, if Athens asks for it.
From technical point of view, in the long run the EUR/USD will continue falling. As to short term perspective, the pair will be experience a lot of fluctuating.
As a reminder, Goldman Sachs said earlier that the pair will target its parity; revising later its target by weakening the single currency even more.
There are two major pressure points for the USD/RUB:
1) Falling of oil prices amid talks with Iran, which is ready to double its oil exports as soon as economic sanctions are lifted;
2) The overall strengthening of the US dollar.
US stock market was the only market to experience significant growth yesterday. The release of USD Trade Balance is scheduled today at 12:30 GMT (forecast –$42.75B, previous –$40.90B). In case if the actual data corresponds with forecast, this indicator will not have a major impact on the market in long or middle term. However, it will definitely determine market movement in short term period.
The S&P may hit the resistance level at 2080.00—2090.00 today. If it breaks through, it may become strong support for the market. On the other hand S&P has a strong support line at 2060.00. It is very unlikely the market fall below. However, if it happens the following upward correction is very likely.
Yesterday’s fall of oil prices is due mainly to the ongoing talks with Iran about lifting sanctions for oil exports. Even though they should end today by the midnight, the market already expects a positive outcome. It will open the way to the oil market for another oil producer and, therefore, increase its supply in the global market.
It appears that in one or two days upward correction is quite possible, which, however, will be followed by decline. In general, the global trend remains negative.