Article / 14 July 2015 at 7:00 GMT

Morning Markets: Oil braced for fallout

Editor / Saxo Bank
Denmark







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Watchlist

  • EU: Industrial Production (0900 GMT) 
  • US: Small Business Optimism Index (1000 GMT) 
  • US: Retail Sales (1230 GMT)

With the Grexit risk no longer a real and present danger traders can refocus on the real economy in Europe. EU industrial production data is up at 0900 GMT with the consensus expecting activity rising at a solid 2.0% year-over-year rate through May — more than double the 0.8% jump in the previous release. 

The Greece deal also means US data carries more clout today. The USD rally was quite broad yesterday, and it has strengthened against the yen and euro after the Greece deal, but will today's retail figures play ball and keep up the Greenback's momentum?

But it's not only Greece that has been embroiled in marathon negotiations. The market has awaited an announcement on a nuclear deal with Iran that could lead to an easing of sanctions against the country and resumption of its oil exports into an oversupplied market. The result? WTI crude has drifted lower to 50.94 at 0655 GMT.

What's more, a deal could be imminent, according to reports. How low will oil go?

Market signals

Asian session

  • China's stocks fall for first time in four days, ahead of tomorrow's GDP data.
  • The Shanghai Composite Index slips 0.6% to 3,947 in early trade.
  • Singapore's GDP falls an annualised 4.6% in the three months through June.
  • The NIkkei 225 up 1.21% to 20,333.78 (at 0530 GMT).
  • Australian business confidence index rises to 10 points in June, the highest for two years.
  • A weekly survey of Australian consumer confidence falls 3.6% to a 12-month low.
  • USDJPY gives back early gains and trades almost unchanged in early Asian afternoon.

Forex ahead

  • USD strengthens against yen and euro after Greece deal.
  • AUD moves higher on improved June businesses confidence survey.
  • USDJPY trades modestly flat at 123.50, having previously posted day’s high at 123.73.

From the Floor

Not over yet?I’m not sure Greece can operate under these terms,” says Hardy

Sigh of reliefThe Shanghai Composite took a breather today,” says Moltke-Leth 

Get all the latest from Saxo Bank's trading floors in From the Floor, within the hour.

In opinion

American dream
James Picerno says the small-business optimism index should point to resilience and optimism among US entrepreneurs, despite the patchy performance of the wider economy.

Home delivery
JD.com has released an O2O app that focuses on the convenience store delivery market, which isn’t a surprise given the firm’s success in online retail, writes Neil Flynn.

Testing times
The NZDUSD is in for a volatile time this week, says Max McKegg, and while key support levels are not far away, record short positions will make it hard for the Kiwi to reach that far.

Eurodrop
With a Greek deal received favourably received by markets, Saxo Bank's head of FX strategy John J Hardy thinks EURUSD will hit 1.05 if we get stronger US data this week. 

Bursting the bubble
China's stock market crash has been as spectacular as its once-dizzying rise. Pauline Loong tells us why. 

Fool's game
Deal or no deal, keeping Greece in the euro club is financial fantasy, thunders Stephen Pope

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Giving Greece new credit before having them back at the table seeking more cash in under a year is simply a step too far, according to Stephen Pope. Photo: Bloomberg 

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Martin O'Rourke Martin O'Rourke
That nuclear deal has now been agreed, according to Reuters, bringing an end to a decade of on-off negotiations. http://www.reuters.com/article/2015/07/14/us-iran-nuclear-idUSKCN0PM0CE20150714

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