The day started early as a Greek Newspaper Article started doing the rounds amongst the Asian traders (see below). The article mentioned an imminent deal and specified times in which the negotiations between Greece and the “Troika” would be finished. EURUSD jumped from 1.4395 through the overnight high to 1.4438 taking out stops at 1.4430. China PMI came out as rumored at 52, and the China fix was also a non-event. (8 ticks lower)
The US House of Representatives voted down the measure to raise US Debt Ceiling, but this could be considered posturing as the key date is not until August 2nd. Thus they have plenty of time to re-negotiate and approve at the last minute (like we recently witnessed).
AUD GDP did come in better than expectations and AUDUSD charged 80 points higher over the course of the next couple hours. AUDNZD bounced hard as traders were squeezed trying to buy back their shorts. Swan comments followed speaking to the fall in GDP and the weather that caused it.
Equities were mixed, trading within .3% positive or negative on the day. A very quiet last few hours post AUD data as we drift into Europe awaiting more headlines out of Greece.
Article that kicked things off in the EURUSD:
“A New Greek Deal with Troika Imminent”
http://www.ekathimerini.com/4dcgi/_w_articles_wsite1_18_31/05/2011_393038
Headlines and Comments
US HOUSE OF REPRESENTATIVES VOTES DOWN MEASURE TO RAISE U.S. DEBT CEILING WITHOUT CONDITIONS
*CHINA MAY RAISE YUAN BAND, RATES, RESERVE RATIO, NEWS SAYS
DJN-DJ JAPAN PM KAN: POSITIVELY CONSIDERING SECOND EXTRA BUDGET, EXTENDING PARLIAMENT SESSION
DJN-DJ TANIGAKI SAYS HE WILL FILE NO-CONFIDENCE MOTION WED EVENING – KYODO
10:20 01Jun11 DJN-DJ AUSTRALIA’S SWAN SAYS 1Q GDP DATA REFLECTS SEVERE WEATHER
10:20 01Jun11 DJN-DJ AUSTRALIA’S SWAN SAYS WEAKNESS IN 1Q GDP DATA CONSISTENT WITH BUDGET FORECASTS
10:21 01Jun11 DJN-DJ AUSTRALIA’S SWAN SAYS ECONOMIC FUNDAMENTALS BEST IN DEVELOPED WORLD
10:21 01Jun11 DJN-DJ AUSTRALIA’S SWAN SAYS ECONOMIC GROWTH TO RECOVER STRONGLY AS MINES RECOVER
10:23 01Jun11 DJN-DJ AUSTRALIA’S SWAN SAYS WITHDRAWS FISCAL STIMULUS AS PRIVATE CAPEX SURGES
10:23 01Jun11 DJN-DJ AUSTRALIA’S SWAN SAYS ECONOMIC GROWTH TO REBOUND STRONGLY IN 2Q
10:24 01Jun11 DJN-DJ AUSTRALIA’S SWAN SAYS MANUFACTURES, SERVICES EXPORTS WEAK ON HIGH A$
10:24 01Jun11 DJN-DJ AUSTRALIA’S SWAN SAYS DOMESTIC FINAL DEMAND IN 1Q REMAINED SOLID
Key Data
09:00 01Jun11 DJN-DJ CHINA’S OFFICIAL MAY PMI 52.0 VS APRIL 52.9 (51.6 expected)
09:15 01Jun11 RTRS-PBOC SETS YUAN MID-POINT AT 6.4837 / DLR VS LAST CLOSE 6.4791
09:15 01Jun11 RTRS-CHINA YUAN MID-POINT SET AT HIGHEST LEVEL SINCE 2005 REVALUATION
09:30 01Jun11 DJN-DJ AUSTRALIAN 1Q GDP -1.2% ON QTR VS -1.4% CONSENSUS
09:30 01Jun11 DJN-DJ AUSTRALIAN 1Q GDP +1.0% ON YR VS +0.7% CONSENSUS
09:30 01Jun11 DJN-DJ AUSTRALIAN 4Q GDP REVISED TO +0.8% ON QTR FROM +0.7%
09:31 01Jun11 DJN-DJ AUSTRALIA’S ABS: NO SIGNIFICANT DATA COLLECTION ISSUES FROM FLOODS
10:00 01Jun11 DJN-DJ TAIWAN MAY PMI 54.9 VS APRIL 58.2
10:00 01Jun11 DJN-DJ Taiwan May PMI 54.9 Vs April 58.2
10:30 01Jun11 DJN-DJ CHINA HSBC MAY PMI 51.6 VS PRELIMINARY 51.1, FINAL APRIL 51.8 – REUTERS
HSBC Global Research