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v US
labour market data disappoints market expectations
v Greek
FM Varoufakis says he will resign on a ‘Yes’ vote in the referendum on Sunday
v Projection
of Malaysia retail sales growth rate is lowered for the third time
v Japan’s
companies' inflation expectations remain broadly unchanged in June
v Japan’s
monetary base at the end of June expands to JPY325 trillion
v South
Korea's current account surplus widen in
May
|
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OVERNIGHT MARKET
UPDATE:
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·
US – Non-farm payrolls rose 223,000 in June, while the
unemployment rate declined to 5.3% from 5.5%. The details were marginally
disappointing. Payrolls growth over the past two months was revised lower by a
cumulative 60,000 and the decline in the unemployment rate was driven entirely
by the 0.3 points fall in the participation rate. Moreover, wages growth
remained flat in June taking annual growth to 2.0%.
·
Euro area – Sweden’s Riksbank cuts its policy interest rate by
10 bps to -0.35% and expanded its asset purchase program by a further SEK45
billion. The move was not expected, with only a handful of economists calling
for a cut. It appears primarily in response to strength in the krona and its
impact on inflation.
·
Greece – Greek Finance Minister Varoufakis said that if there is
a ‘Yes’ vote in the referendum on Sunday, he will resign. He also mentioned
that the banks will reopen as normal on Tuesday no matter what the outcome of
the referendum. The ECB will discuss the Emergency Liquidity Assistance (ELA)
with Greece on Monday after the referendum result is known. A number of euro
area Finance Ministers have stated that in the event of a ‘No’ vote it would be
very difficult to negotiate with Greece.
·
Currency – USD pulled back after payrolls, but the trend remains
strong. Meanwhile, krona plunged as the Riksbank cut rates to
-0.35%.
·
Rate – US Treasuries rallied on the disappointing employment
report. The curve flattened with the US 2- and 10-year yields down 6 bps and 4
bps, respectively.
·
Equity – S&P 500 and Dow Jones were little
changed.
·
Energy – Oil prices closed lower as negative sentiment stemmed
from increased US oil rigs count. US Shale producers have brought down the
breakeven cost from USD35 to USD20 per barrel, where the current range of oil
price at USD55-60 per barrel is attractive for shale
producers.
Precious Metal – Gold prices slipped for a third straight session on
continued hopes for a deal in the Greek financial crisis. The losses was pared
after the dollar weakened on some disappointing US labour market data.|
INDICATIVE MAJOR CURRENCIES
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