Daily FX Update, 30 June 2015

v  US pending home sales increase in May   v  S&P downgrades Greece’s credit ratings to CCC- with negative outlook   v  Malaysia government provides RM880 mil to State Reserve Fund from 2015 to 2017 v  Japan’s industrial output drops in May v  Japan's retail sales increase in May, consistent with the increase of household expenditures in May v  Singapore's producer prices decline at a faster pace in May

OVERNIGHT MARKET UPDATE:

·         US pending home sales increased 0.9% on monthly basis in May. Overall, housing market data remains upbeat with a number of demand side supports.  

·         The Dallas Fed survey rose modestly to -7.0 in June from –20.8. On balance, regional Fed surveys point to a modest improvement in the ISM manufacturing survey published on Wednesday.

·         Standard & Poor’s Ratings Services downgraded Greece’s credit ratings to CCC- from CCC with a negative outlook, while speculating that the probability the country will exit the Eurozone is roughly 50%.

·         German CPI data disappointed market expectations declining 0.2% m/m. With Germany accounts for 28% of the euro area CPI, it put more downside risk to the index that is publishing at today.  

·         UK mortgage approvals decreased to 64.4k in May from 67.6k in April. However, net mortgage lending rose in May, signaling that the underlying momentum in the housing market remains positive.  

·         Currency Market – A choppy session that ultimately resulted in a round trip yesterday. Most currencies and crosses returned to their Friday close levels as markets express confidence that Greece is contained.    

·         Safe haven demand contributed to falls in US Treasury yields from the week’s open. The 5- and 10-year yields both declined 13 and 15 basis points to 1.62% and 2.32% respectively.     

·         US stocks were all down between 2.0 and 2.4%, their largest daily drop in two months, on Greek concerns.      

·         Crude oil prices plunged overnight, with prices dropped to the lowest level in two months amid Greece concerns. Market players also cut their net-long position in WTI and Brent respectively at the week ended 23 June.

Gold prices settled at their highest level in a week as a worsening financial crisis in Greece helped boost the metal’s haven appeal for a second straight session.

INDICATIVE MAJOR CURRENCIES Last Close  8.06 am Snapshot        Bid                   Offer Expected Ranges for Today         Low                       High USD/MYR 3.7843 3.7580 3.7920 3.7560 3.8010 JPY/MYR (100) 3.0902 3.0600 3.0940 3.0500 3.1100 SGD/MYR 2.8109 2.7850 2.8190 2.7800 2.8400 EUR/MYR 4.2433 4.2150 4.2500 4.1900 4.2800 AUD/MYR 2.9086 2.8820 2.9140 2.8700 2.9400 GBP/MYR 5.9565 5.9200 5.9560 5.8900 6.0100 USD/JPY 122.46 122.47 122.88 122.07 123.07 EUR/USD 1.1213 1.1060 1.1370 1.1160 1.1270 AUD/USD 0.7686 0.7520 0.7830 0.7630 0.7730