Euro Steady as Greece Report Sparks Renewed Hopes

 
Snapshot: 

        -Euro steady; 10-year Treasury yield at 2.365%; Stock futures sharply higher; Nymex crude at $58.59; gold at $1173.50
        -Watch for: MBA weekly mortgage applications survey; ADP national employment report; manufacturing PMI; ISM manufacturing report on business; global manufacturing PMI; earnings from General Mills, Constellation Brands
        News: Fed's Fischer Sees Gradual Rate Increase; Greek Poll Points to No Vote; Greece Defaults on IMF Loan
        The euro was broadly steady against the dollar at $1.113 as optimism grew about a possible deal between Greece and its creditors Wednesday.
        Beyond Greece, investors will focus on the latest ADP private-sector employment snapshot. The consensus is an optimistic and realistic 218,000, while the nonfarm payrolls Thursday are expected to secure a sound 230,000 in June.
        "Should the U.S. jobs data meet the market expectations, the Fed hawks will not refrain from pushing the dollar higher against its G10 and EM peers before the weekly closing bell," said Micky Izelaar at Morgan Rossiter.
        In the Asian trade, the euro was only slightly lower against the dollar following Greece's default on an IMF loan, with investors choosing to avoid any major moves ahead of Sunday's referendum on eurozone bailout conditions.
        "It is possible that dollar-led moves will give direction" to the euro-dollar pair," said Kumiko Ishikawa at Gaitame.Com, referring to upcoming U.S. data.
        Currency market participants staged an exodus to the Japanese currency as their preferred safe-harbor on mounting fears about Greece's future in the eurozone at the beginning of the week.
        "Investors now find it difficult to make moves" ahead of the U.S. non-farm payroll data for June and the referendum, said Mizuho Securities FX strategist Kenji Yoshii.
        "If the jobs data fare well, the dollar will be bought on expectations for a rate increase in September," said Mr. Yoshii.
        U.S. Treasury yields pushed higher in Europe as stock markets gained around 1%, despite Greece missing a EUR1.5 billion payment and being in arrears to the IMF.
        At 4.46am ET, the 10-year was quoted with a yield of 2.365% while the September contract was 10/32 lower at 125-275.
        In Europe, the yield on the German 10-year bond was largely unchanged on the day at 0.77%. The yield on 10-year Italian debt was steady at 2.31% and was marginally higher on the Spanish 10-year at 2.27%.
        Greek stock markets will remain closed this week and on Tuesday bond trading platform Tradeweb said it had blocked trading in a number of Greek government bonds after a notification from the U.K. regulator. Traders said turnover in Greek government debt has almost ground to a complete halt.
        U.S. stock futures moved sharply higher on Wednesday after a report that Greek Prime Minister Alexis Tsipras is ready to accept the creditors' bailout terms.
        According to a letter from Mr. Tsipras to the heads of the European Commission, International Monetary Fund and European Central Bank, obtained by the Financial Times, the Greek premier will accept all the bailout conditions on the table last weekend, with only minor changes.
        The Stoxx Europe index was up 1.7%, following two sessions of heavy losses. Germany's DAX climbed 2.2%, France's CAC added 2.5%.
        Greece's bailout program expired on Tuesday at midnight, but Mr. Tsipras's letter could serve as basis for a new aid package in coming days, according to the report.
        Oil prices were in the red in London on bearish U.S. oil inventory data and continuing signs that the world has an oversupply of petroleum that won't end soon.
        August-dated Brent crude, the global oil price benchmark, fell 1.1% to $62.86 a barrel on London's ICE Futures exchange. On the New York Mercantile Exchange, West Texas Intermediate for delivery in August was trading down 1.5% at $58.59 a barrel.
        "The build in crude surprised the markets which will now closely watch EIA's report," said Michael Poulsen at Global Risk Management. "Expect some volatility ahead of the publishing."
        Gold was just short of 0.2% higher at $1,173.50 per troy ounce.
        Fed's Fischer Sees Gradual Rate Increase
        Federal Reserve Vice Chairman Stanley Fischer said Tuesday that Fed policy makers are on track to raise interest rates "when we have seen further improvement" in the labor market and inflation.
        Greek Poll Points to No Vote
        Most Greeks plan to reject the country's creditors bailout terms in a referendum to be held this weekend though support for Greece to stick to austerity and secure its place in the eurozone is growing, according to an opinion poll.
        Greece Defaults on IMF Loan
        Greece became the first advanced economy to default on loans from the IMF, despite Athens's last-minute push for emergency aid.
        World Bank Calls for Fundamental China Reforms
        China needs to lessen the role of the state with reform starting "at the highest level," says the World Bank.
        Iran, Global Powers Extend Nuclear Talks Deadline
        President Barack Obama said he is prepared to walk away from a nuclear deal with Iran unless Tehran accepts a tight monitoring regime as negotiators extended talks for a week past Tuesday's deadline to conclude a comprehensive agreement.
        Jeb Bush Releases 33 Years of Tax Returns
        Jeb Bush said his total net worth is between $19 million and $22 million as he released 33 years of returns.
        U.S. to Open Havana Embassy
        The U.S. and Cuba have reached an agreement to restore diplomatic relations and reopen embassies in each other's capitals, the biggest step yet toward ending a half century of animosity between the two countries.
        Write to Sarka Halas at sarka.halas@wsj.com
        (END) Dow Jones Newswires

        July 01, 2015 06:22 ET (10:22 GMT)

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