Dollar Firm Ahead of Greek Summit

 
Snapshot: 

        -EUR/USD at 1.0967-70; 10-year Treasury yield at 2.305%; U.S. stock futures gain; Nymex at $52.92; gold at $1168
        -Watch for: IMF report; goods & services trade data; job openings and labor turnover; Canada trade balance; Eurogroup summit on Greece; earnings update from Jean Coutu
        News: Summit Offers Chance on Greece Negotiations; Australian Central Bank Keeps Rates Steady; China Shares Fall Amid Doubts Over Beijing's Rescue
        The dollar was slightly higher against the yen and the euro Tuesday, with investors avoiding big moves as the eurozone's top decision makers were meeting in an urgent effort to get back to the negotiating table on Greek bailout funding.
        Time is running out quickly before Greece's banks-closed for most business for over a week-run out of cash, potentially pushing the already suffering country into further economic meltdown and an exit from the euro.
        But officials warn a solution won't come immediately, foreseeing more lengthy talks before any deal on how to keep Greece in the eurozone can be sealed.
        The euro was 0.7% lower against the dollar in early European trade, at around $1.098.
        "Regardless of the outcome, the main scenario is a moderate pace of dollar strengthening and yen weakening," Koji Fukaya from FPG Securities said in a note, adding that U.S. economic fundamentals and monetary policy are what investors should eventually take into consideration.
        In the event of a rate increase in September, or signs that such a move is imminent, the dollar will likely strengthen to near Y125 and then to Y127 by end of this year, Mr. Fukaya said.
        Among other currency trade pairs, the Australian dollar remained steady after the Reserve Bank of Australia left rates unchanged.
        Focus for Treasury investors is on Greece as well as three-year, 10-year, and 30-year U.S. Treasury auctions in the next three days, according to Ted Wieseman at Morgan Stanley.
        Ahead, attention turns to the FOMC minutes on Wednesday as well as a speech on the economic outlook by Janet Yellen on Friday "to see if there is pushback against the market's ratcheting down odds of a September rate hike in response to Greece risks."
        At 4.06am ET, 10-year Treasurys yielded 2.305% and the September contract traded 4/32 lower at 126-195.
        The yield on Germany's 10-year benchmark bond was around 0.05 percentage points lower on the day, and yields on 10-year Italian and Spanish debt were roughly 0.04 percentage points lower.
        After a choppy start to the week, U.S. stock futures pointed higher ahead of fresh trade data and key meetings on Greece's future.
        Futures for the Dow gained 73 points, or 0.4%, while those for the S&P 500 picked up 10.90 points, or 0.5%. Futures for the Nasdaq climbed 19.75 points, or 0.5%.
        Ahead, the U.S. trade deficit figure for May is due and economists polled by MarketWatch expect a widening to $42.1 billion, from $40.9 billion in April.
        "Trade data have been volatile in recent months as a result of the West Coast port strikes that were resolved in mid-February," said Barclays analysts in a note.
        Exports have softened over the past six months on weak international demand and the stronger dollar. Container volumes for May suggest a modest uptick in imports and a decline in exports, which we expect to lead the deficit to widen," they added. Later, a report on job openings for May is due, followed by consumer-credit numbers for the same month.
        Crude oil prices rose in European trade, clawing back some ground after steep declines, but the persistent glut in global markets is likely to keep prices under pressure.
        Crude futures on the NYME for delivery in August traded at $52.92, up $0.39 in the Globex electronic session. August Brent crude on London's ICE Futures exchange rose $0.52 to $57.06.
        Gold was 0.5% lower on the day at $1168.
        Summit Offers Chance on Greece Negotiations
        The eurozone's top decision makers were meeting in an urgent effort to get back to the negotiating table on Greek bailout funding after voters overwhelmingly rejected creditors' austerity measures..
        Solution to Greek Crisis Won't Come Overnight, Juncker Warns
        A summit of eurozone leaders won't bring a solution to Greece's financial crisis, the president of the European Commission said, indicating that if the country is to stay in the eurozone it will take lengthy negotiations.
        ECB's Nowotny: If Greece Misses Payment, Funds Will Be Cut Off
        The European Central Bank will be forced to cut off liquidity to Greece should it miss the July 20 deadline to pay back the central bank, said Ewald Nowotny, a member of the bank's governing council.
        U.S. Seeks Mideast Shift After Nuclear Deal
        The White House is crafting a Middle East strategy for the remaining 18 months of President Barack Obama's term that would more forcefully address conflicts in Iraq, Yemen and Syria amid tensions over the conclusion of talks with Iran.
        Australian Central Bank Keeps Rates Steady
        Australia's central bank kept interest rates steady while playing down any immediate risk posed to the economy by uncertainty surrounding Greece's debt negotiations and recent sharp falls in Chinese share prices.
        China Shares Fall Amid Doubts Over Beijing's Rescue
        China's stocks fell Tuesday, casting doubt on the potency of Beijing's aggressive rescue efforts, while investors elsewhere in Asia appear to shrug off concerns over Greece's debt situation.
        Write to Riva Gold at riva.gold@wsj.com @GoldRiva
        (END) Dow Jones Newswires

        July 07, 2015 06:23 ET (10:23 GMT)

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