The market should have been dominated by tomorrow’s Fed meeting and the end of QE2. Instead all our energies have gone into analysing the Greek situation and to be frank the market in Europe has got Greek fatigue. At the FOMC we will all be watching how they deal with the end of QE2, which concludes at the end of June. The following week we will have the payrolls data 8th July (sometimes when the payrolls falls on the first they move it to the following week). We then have the debt ceiling issue to deal with and here we have a target date of Aug 2nd. Our greatest concern is that in the midst of the recent Greek crisis the euro hardly broke sweat – 1.40. Thus if we were to believe that the eurozone has successfully bought time – until 2013 – and the US is now our central focus then the USD could take a beating.
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HSBC Global Research