Daily FX Update, 14 July 2015

v  BoE Credit Conditions & Bank Liabilities Survey shows positive result        v  An agreement between Greece and its creditors have been reached v  There is a heavy foreign outflow from Malaysia equity market in previous week v  Japan's May industrial production revises upward from the flash data v  China's exports stage a modest recovery in June

·         UK –Bank of England (BoE) Credit Conditions & Bank Liabilities Survey showed heightened demand for mortgages in the second quarter and saw lending to businesses improve. The survey also found credit card issuers were also relaxing lending conditions by lengthening interest rate-free periods to borrowers.

·         Greece – An agreement between Greece and its creditors have reached with a package worth up to EUR86bn expected to meet Greece’s financing needs for the next three years. This also includes up to EUR25 billion of capital to support Greek banks. Significant changes will be on Greece’s tax and pension systems, further privatization of assets, as well as labour and product market reforms. If Greece fails to comply with these requirements, then there will be no basis for a new bailout. Once the Greek parliament has passed the four key reform measures, the ESM parliamentary process could begin, with ratification required by ECB members, and the possibility that bailout negotiations could start later this week. The ECB’s ELA cap at EUR89bn could be raised if the Greek parliament is making progress.

·         Currency – Markets removed safe haven trades with JPY and CHF under-pressure, however, the EUR weakened. The USD strengthened as markets switch from USD as safe haven, to USD as the normalising economy.

·         Equity – US stocks were buoyed by the positive Greek developments, with the S&P 500 and DJIA up over 1%.

·         Rate – Bond yields rose across core markets like the US and UK whereas German and core euro area 10-year bond yields fell 2-4 bps.

·         Energy – Oil prices eased overnight but remained above recent lows. Crude oil prices saw the largest weekly fall last week since March as markets priced in an Iranian nuclear deal and rising stocks in the US.

Precious Metal – Gold prices  slipped after Eurozone leaders struck a deal to negotiate a Greek bailout.

INDICATIVE MAJOR CURRENCIES Last Close  8.14 am Snapshot        Bid                   Offer Expected Ranges for Today         Low                       High USD/MYR 3.8030 3.7900 3.8230 3.7880 3.8330 JPY/MYR (100) 3.0826 3.0630 3.0970 3.0600 3.1200 SGD/MYR 2.8029 2.7810 2.8140 2.7800 2.8300 EUR/MYR 4.1913 4.1640 4.1980 4.1400 4.2300 AUD/MYR 2.8199 2.7990 2.8320 2.7800 2.8600 GBP/MYR 5.8985 5.8760 5.9110 5.8500 5.9600 USD/JPY 123.37 123.39 123.80 122.99 123.99 EUR/USD 1.1021 1.0830 1.1140 1.0930 1.1040 AUD/USD 0.7415 0.7240 0.7550 0.7350 0.7450