EUR rallies towards 1.10 on Greek bailout passage

Thursday, July 23, 2015

The Greek parliament approved bailout reform package after passing a crucial bill demanded by Eurozone as part of a bailout deal. At another late-night session in the Greek parliament, 230 MPs voted “yes” and supported a second package of austerity measures, while just 63 MPs opposed it. However, political uncertainty continues to dominate the country as there are new reports that Prime Minister Alexis Tsipras could call snap elections in September. In the meantime, the ECB reported a further increase of its current ELA funding of 0.9 bln euro in order to support the Greek banking sector.

EURUSD rallies strongly to retest 1.10

 EURUSD Curncy (EUR-USD X-RATE)  2015-07-23 08-54-49

The euro rallied strongly towards 1.10 against the USD this morning following the Greek approval. European equity markets climbed higher in early trade as the DAX, CAC, IBEX and London equity benchmark indices gained between 0.30% and 0.6%. The softer USD currently provides support to most commodity prices as the USD dropped below 97.0 against a basket of currencies this morning. Gold rebounded above $1100/ounce, recovering from yesterday’s sharp losses. Silver climbed higher this morning, eyeing the $15 level.

Crude oil prices remain under pressure as bearish oil fundamental data weigh on market sentiment, prompting another sharp sell-off in the market. WTI front month futures tumbled below the key level of $50 per barrel yesterday following a bearish EIA oil inventories report which confirmed a build of 2.46 mln barrels versus estimates of a 1.45 mln barrels drop. This morning, WTI front month futures have been hovering around $49.40 per barrel while Brent futures held around $56 per barrel.

WTI front month futures tumble below $50 

CLU5 Comdty (WTI CRUDE FUTURE  S 2015-07-23 08-56-25

Today, the main focus will turn to the release of the US weekly jobless claims as well as Chicago Fed National Activity Index and Kansas City Fed Manufacturing Activity index. In the UK, market participants will be keeping an eye on the release of the retail sales data for June. Spain’s unemployment rate dropped to 22.37% in Q2 2015 from 23.78% in Q1 2015, beating analysts’ expectations.   

 

Events for today:

0930

UK

Jun

Retail Sales

1330

US

Jun

Chicago Fed

1330

US

w/e

Jobless Claims

1500

EZ

Jul

Consumer Confidence

1500

US

Jun

Leading Index

1530

US

w/e

EIA Nat Gas

 

All times UK Local Time

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