ASIA session review 09.07.2013:

Data released (actual, consensus, previous):           

01:30    CN    CNY    Consumer Price Index (MoM) (Jun)    0.0%    -0.2%    -0.6%        

01:30    CN    CNY    Consumer Price Index (YoY) (Jun)    2.7%    2.5%    2.1%        

01:30    AU    AUD    National Australia Bank's Business Conditions (Jun)    -8        -4        

01:30    AU    AUD    National Australia Bank's Business Confidence (Jun)    0        -1        

01:30    CN    CNY    Producer Price Index (YoY) (Jun)    -2.7%    -2.7%    -2.9%        

06:00    JP    JPY    Machine Tool Orders (YoY) (Jun)Preliminar    -12.4%        -23.6%        

06:45    FR    EUR    Budget (May)    €-72.6B        €-66.8B        

07:15    CH    CHF    Real Retail Sales (YoY) (May)    1.8%    1.9%    3.1%

The euro strengthened for a third day against the yen as European Union finance ministers meet in Brussels, a day after agreeing to release 3 billion euros ($3.9 billion) of aid for Greece.

The dollar weakened against most of its major peers as Federal Reserve Chairman Ben S. Bernanke prepares to speak tomorrow amid speculation he will provide further guidance on plans to scale back asset purchases. He talks on the same day minutes of the U.S. central bank’s June meeting are due.

The euro has gained 4.6%this year, the second-best performance among 10 developed-nation currencies. The dollar has risen 7.3%, while the yen is the biggest loser, dropping 9.6%.

EURO:

The euro recovered a bit ahead of a possible announcement later Monday that Greece will receive its next round of financial aid from its international lenders.

On Monday, Troika finalised Greek review:

-have reached a staff-level agreement with Greek government;

-macro outlook broadly in line with adjustment program;

-outlook remains uncertain but sees possibility of a return to growth in 2014;

-government committed to take corrective action;

-some policy implementation has fallen behind.

EUR/USD consolidates near $1.2880, recovering from $1.2800 lows (Friday’s and May 17 lows) with a break below widens losses to $1.2745 (Apr 24 lows) and $1.2660 (Dec 13’2012 lows). Initial resistance is near $1. 2880/90 (Friday’s hourly high), then - at $1.3030 (high Jul.3) and $1.3080 (high Jul.2).

POUND:

The pound was little changed against the dollar and euro before a report that economists said will show industrial production expanded in May.

Industrial output rose 0.2% in May after gaining 0.1% the previous month, according to the median estimate of analysts.

Morgan's are saying a subdued response to recent UK data points to further lows in GBP/USD. While the service sector is holding up well they don't see it holding up the pound on its own. They see cable at 1.45 by the end of Q3 and 1.41 by year-end.

GBP/USD holds a bit above $1.4900, off recent lows near $1.4850 (initial support). Below support comes at $1.4820 (Mar 12 lows) and $1.4780 (Feb 28’2010 lows). Initial resistance is near $1.5020 (Friday’s Asia higihs), then - at $1.5130 (Jul 3 lows).

YEN:

remain under pressure amid an optimism Prime Minister Shinzo Abe will push through economic reforms after winning upper house elections on July 21.

USD/JPY holds below recent highs on Y101.50 - currently at Y101.20. Support comes at Y99.90 (Friday’s low) and Y99.50 (Jul 4 low). Resistance is around Y102.20 (channel line from Jun 14), then - at Y103.70 (May 22 high).

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