Wednesday, April 22, 2015

Greek problems continue to pressure EUR

•     Greek problems continue to pressure EUR
–    Talk is that the ECB may increase the haircut on collateral submitted for ELA
–    It’s unclear whether Greek banks can meet the additional demand; some say yes
–    Greek citizens are pulling EUR 8bn a month out of the banks so they need ELA
–    EUR/USD showing the impact of Greek problems:  EUR tends to hit the day’s low during London time in reaction to headlines, then rise in NY as traders play the range

•     Negative EUR market rates to pressure EUR further
–    3M EURIBOR went negative yesterday; futures say it stays negative till QE ends
–    US LIBOR forecast to rise; this monetary divergence is driving currency rates

•     Oil falls on Saudi moves, rise in inventories
–    Saudi Arabia ended its bombing in Yemen, reducing ME tensions slightly
–    API data shows another rise in inventories; market looks for EIA confirmation tonight
–    Fall in oil prices could weigh on CAD, NOK today

•     Australia CPI sends AUD higher
–    Market apparently looked at the rise in the “weighted median measure” of CPI
–    Probability of a hike at 5 May RBA meeting declined, AUD firmed
–    RBA Gov. Stevens says rate cut “still on the table” so don’t discount the idea entirely

•     Today:
–    Eurozone: Just waiting for more headlines about Greece. No major speeches planned
–    UK:  Bank of England releases minutes of recent MPC meeting.

–    US: FHFA housing price index for Feb, existing home sales for March

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