Risk sentiment firms ahead of Greek Confidence Vote

Risk appetite firmed and the dollar was weaker across the board. The Scandies outperformed with USD/NOK and USD/SEK falling by nearly -0.83% and -0.79% respectively. The Greek situation remained in the forefront as investors awaited the Confidence Vote due out around 5pm ET. The market seemed somewhat optimistic that Greece will avert a default, however as the IMF’s John Lipsky put it “no one is expecting miracles” in Greece. Lipsky went on to say that the Greece program has a ‘reasonable chance’ of success. EUR/USD rallied to current levels of around 1.4400 ahead of the vote.

In the U.S., May existing home sales fell by -3.8% m/m to 4.81M from the prior 5.00M which was broadly in line with expectations. Canada’s April retail sales came in below expectations highlighting the soft patch in economic data in the developed world. Headline retail sales for April was +0.3% m/m (exp. +0.4% prior -0.1%) and sales less autos was 0.0 (exp. +0.6% prior -0.2%). May leading indicators for Canada were firmer than the forecast of +0.5% with a print of +1.0% from the prior month’s +0.9%. USD/CAD fell towards the 100-day SMA and currently trades around 0.9730 on the back of a stronger Loonie.

U.S. equities traded with a positive tone with the Dow Jones Industrial Average climbing by around +0.91% to close out the session while the S&P 500 advanced by about +1.34%. Commodities gained with gold, silver, and oil up around +0.35%, +1.05% and +0.15% respectively. U.S. 10-yr Treasury yields saw a choppy session but edged higher by about 2 basis points to nearly 2.98%.

On the data front for the upcoming Asia/Pacific session is the important Greek Confidence Vote, New Zealand current account balance for 1Q and May credit card spending, the April Westpac Leading Index out of Australia, and Japan’s May supermarket sales.

Source: Forex.com

21.06.2011