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Greece Fiasco on Hold Pending Referendum, Pound May Fall on PMI

Greece Fiasco on Hold Pending Referendum, Pound May Fall on PMI

Ilya Spivak, Head Strategist, APAC

Talking Points:

  • Greece Crisis in a Holding Pattern Ahead of Weekend Referendum Outcome
  • Pound May Decline as Soft PMI Data Undercuts BOE Interest Rate Hike Bets
  • See Economic Releases Directly on Your Charts with the DailyFX News App

All eyes remain on Greece after the country missed its scheduled €1.6 billion repayment to the IMF. A statement from the fund said the country is now “in arrears”, which means it is unable to receive further funding until the issue is resolved. Athens requested an extension of the deadline, which the IMF said would be considered by its executive board “in due course”.

Presumably, this means the declaration of a formal default will wait for now. This will allow Christine Lagarde and company to avoid forcing the matter until after the outcome of a referendum on the creditors’ proposals scheduled for the weekend. It may likewise leave room for the ECB to continue offering ELA support to Greek banks, which the central bank probably prefers to do until the democratic process on the ground has a chance to play out.

Eurozone finance ministers are due to hold a conference call on Athens’ request for an extension of its now-expired bailout program as well as debt relief and a two-year loan from the currency bloc’s rescue fund. A meaningful shift in the landscape seems unlikely to emerge from the meeting however. Indeed, German Chancellor Angela Markel said officials will “negotiate about absolutely nothing” with the Greek government until the results of the referendum are on-hand. Still, the situation is highly fluid and significant headline risk remains.

On the economic data front, June’s UK Manufacturing PMI data headlines the docket. The index is expected to edge higher to 52.5, putting the pace of factory-sector activity growth at a three-month high. UK news-flow has tended to underperform relative to consensus forecasts recently, opening the door for a downside surprise. Such an outcome may push back BOE rate hike expectations, weighing on the British Pound.

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Asia Session

GMTCCYEVENTACTEXPPREV
23:30AUDAiG Perf of Mfg Index (JUN)44.2-52.3
23:50JPYLoans & Discounts Corp (YoY) (MAY)2.91%-2.63%
23:50JPYTankan Large Mfg Index (2Q)151212
23:50JPYTankan Large Mfg Outlook (2Q)161410
23:50JPYTankan Large Non-Mfg Index (2Q)232219
23:50JPYTankan Large Non-Mfg Outlook (2Q)212317
23:50JPYTankan Large All Industry Capex (2Q)9.3%5.3%-1.2%
23:50JPYTankan Small Mfg Index (2Q)011
23:50JPYTankan Small Mfg Outlook (2Q)010
23:50JPYTankan Small Non-Mfg Index (2Q)453
23:50JPYTankan Small Non-Mfg Outlook (2Q)13-1
00:00AUDCoreLogic RP Data House Px (MoM) (JUN)2.1%--0.9%
01:00CNYMfg PMI (JUN)50.250.450.2
01:00CNYNon-Mfg PMI (JUN)53.8-53.2
01:30AUDBuilding Approvals (MoM) (MAY)2.4%1.2%-5.2%
01:30AUDBuilding Approvals (YoY) (MAY)17.6%14.4%18.0%
01:35JPYNikkei Japan PMI Mfg (JUN F)50.1-49.9
01:45CNYHSBC China Mfg PMI (JUN F)49.449.649.6
05:00JPYVehicle Sales (YoY) (JUN)5.4%-1.4%
06:30AUDCommodity Index AUD (JUN)80.2-77.9
06:30AUDCommodity Index (YoY) (JUN)-17.9%--20.8%

European Session

GMTCCYEVENTEXP/ACTPREVIMPACT
07:30CHFPMI Mfg (JUN)50.0 (A)49.4Low
07:45EURMarkit/ADACI Italy Mfg PMI (JUN)54.1 (A)54.8Low
07:50EURMarkit France Mfg PMI (JUN F)50.550.5Low
07:55EURMarkit/BME Germany Mfg PMI (JUN F)51.951.9Medium
08:00EURMarkit Eurozone Mfg PMI (JUN F)52.552.5Medium
08:30GBPMarkit UK PMI Mfg SA (JUN)52.552.0High
15:30EUREurogroup Teleconference on Greece--High

Critical Levels

CCYSupp 3Supp 2Supp 1Pivot PointRes 1Res 2Res 3
EURUSD1.09041.10361.10911.11681.12231.13001.1432
GBPUSD1.55611.56441.56781.57271.57611.58101.5893

--- Written by Ilya Spivak, Currency Strategist for DailyFX.com

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