Daily FX Update, 22 April 2015 OVERNIGHT MARKET UPDATE:

·         The German ZEW survey was generally upbeat in April, with the current situation component rising to 70.2 from 55.1 – the highest level since 2011. However, the expectations component weakened marginally to 53.3 from 54.8. Nonetheless, on the whole, these data suggest that investor confidence remains upbeat and that Greek debt negotiations have had little impact on sentiment at this stage. 

·         Greek PM Tsipras and FM Varoufakis’ approval ratings are falling sharply, dropping to 45.5% in April from 72% in March.

·         EU Commission President Juncker said he is “not happy at all” with the progress on Greece talks, but that it is inconceivable to let Greece fall.   

·         An EU official says 30 June is the real deadline for Greece, as hopes of a deal before 30 April fade.

·         In the currency market, the AUD found solid demand overnight, but later retraced gains. This drove AUD/NZD within striking distance of parity. The USD took a breather overnight, giving back gains.       

·         US treasury yields rose 2.6 bps, while yields on the US 2-year note shed some of the previous day’s gains.             

·         US equity markets were mixed, with the DJIA down 0.5% and the S&P 500 down 0.2%, while the NASDAQ was up 0.4% on M&A activity.       

·         Crude oil markets were weaker, with Brent prices failing to break through the key USD62-63/bbl level that has been tested a number of times so far this year. Saudi Arabia announced an end to its three week military bombing campaign reducing tensions in the Middle East. The extent of the build in US crude oil stocks was also in the minds of traders with the weekly release of API data.           

Gold prices end higher on its safe haven appeal as investors remained concerned over Greece’s financial health with no indication of any agreement with Athens on the economic reforms sought by European Union to unlock the bailout aid.