Monday has been pretty quite so far on the fore dance floor with a bit of a pull back on the US dollar versus her major dancing partners after Friday’s rallies.
On Friday we had both the US and Canada printed stronger than expected employment reports for the month of May showing both economies are heading towards a brighter future with possible rainbows and a September Fed rate hike.
Even though the policymakers over at the Bank of Canada aren’t exactly gearing up for a rate hike just yet, Canada’s May employment report could give them enough reason to maintain their neutral stance or even shift to a slightly hawkish one.
Now before getting too excited about US and Canada’s economic improvements, keep in mind that the energy and oil sectors on the other hand have shown weakness with the mining industry reporting loss of 17,000 jobs in May, marking fifth consecutive monthly decline in hiring. A lot of projects have been either canceled or delayed since the tumble in oil prices.
Judging from the forex reaction to these reports, it looks like the Greenback and the Loonie might be in for more upside, especially against their currency counterparts whose economies aren’t faring so well. Of course one or two good data points aren’t enough to make a trend and that could be the reason for the pullback Monday morning.
Relations Between Greece and Europe Getting Worse
Tensions over reforms-for-aid negotiations came to a head Sunday when European Commission President Jean-Claude Juncker accused the Greek Prime Minister Alexis Tsipras of distorting what the creditors had proposed to make some headway in securing a deal for the country.
This was a very different picture from last week. Relations between Juncker and Tsipras appeared to have soured very quickly after what seemed to be an amicable meeting last Wednesday.
Speaking at the Group of Seven (G-7) summit in Germany on Sunday, Juncker said he was a “little bit disappointed by the [Tsipras] speech.” where he said he was “unpleasantly surprised” by the offer made by Juncker.
Negotiations between Greece and its international creditors over a reforms-for-aid deal are expected to continue this week and the results could have an impact on Mr.Euro’s dance moves.
G7 Meetings to Continue for 2 Days
Just in time for the G7 summit, Ukraine’s President Petro Poroshenko warned on Wednesday of a possible “full scale invasion” by Russia as fighting in Eastern Ukraine was at its worst since the signing of Minsk 2.
The U.S. might be willing to push for continued and increased sanctions against Russia, but with various European leaders, specifically Italian Prime Minister Matteo Renzi, representing a more dovish stance towards Russia, the U.S. might not find the consensus it is hoping for.
Economic Calendar
- National Australia Bank Business Confidence – Tuesday 2:30 AM GMT
- Chinese CPI – Tuesday 2:30 AM GMT
- Reserve Bank of New Zealand Rate Statement – Wednesday 10 PM GMT
- Australia’s jobs report – Thursday 2:20 AM GMT
- US Retail Sales – Thursday 1:30 PM GMT
- US Prelim University of Michigan Consumer Sentiment – Friday 3 PM GMT
