And just like that, it’s already June!
US GDP as Expected:
US Preliminary GDP on Friday came in at -0.7%. This showed that their economy contracted during the quarter, but still was a slight beat on the -0.8% expected. I was expecting more of a reaction from this number and thought it would be a real catalyst for some directional trading this coming week, but with the number coming in that close to expectations, the slight miss has already been mostly priced in and this shouldn’t spur any soundbites from the Fed.
Just keep in mind that although the slight miss was still viewed fairly positive by markets due to expectations of a first quarter slowdown being managed, this release marked the 3rd quarterly contraction since the GFC.
Greece Weekend Soap Opera:
Greek Prime Minister Alexis Tsipras:
“The lack of an agreement so far is not due to the supposed intransigent, uncompromising and incomprehensible Greek stance, it is due to the insistence of certain institutional actors on submitting absurd proposals and displaying a total indifference to the recent democratic choice of the Greek people.”
“Plans for collective bargaining by unions adhere to norms in the euro region while reforms for retirees mandated by the country’s bailout agreement aren’t fit for a civilized country.”
Pension reform is still throwing up the biggest hurdle for the reforms needed to keep kicking the can down the road. If you’ve been reading my morning blogs, you’d have noticed that as the market gets more and more desensitised to the sound grabs and printed headlines, I’ve been trying to look at it from the perspective of what is best for the Greek people.
It’s so easy to forget that these headlines we trade and throwaway affect real working people and that last Tsipras quote for me sums it up.
Rumours of my impending resignation are (for the umpteenth time) grossly premature…
— Yanis Varoufakis (@yanisvaroufakis) May 31, 2015
When in a position of relative power and you feel the need to take to Twitter to assure the world that rumours aren’t true, they often are. Where there’s smoke there’s fire and all that good stuff… Sorry Yanis.
But my favourite story from the weekend came from a German Children’s television program called ‘Logo’. A young girl reporting on the EU speaking to German Finance Minister Wolfgang Schaeuble gave a handful of chocolate Euro coins to the politician.
Schaeuble’s reaction was equally as good, thanking the young reporter and giving us this piece of gold:
“I’ll take a few for my Greek colleague, he also needs strong nerves.”
On the Calendar Today:
We kick off June with a bang during Asia with Manufacturing data out of China and Building Approvals from Australia.
There are a few more 2nd and 3rd tier releases on the calendar tonight that you should also keep an eye on with the 2nd tier feature being the Fed’s Fischer’s speech to the American Bankers Association International Monetary Conference, in Toronto.
CNY Manufacturing PMI
AUD Building Approvals
CNY HSBC Final Manufacturing PMI
EUR Final Manufacturing PMI’s
GBP Manufacturing PMI
USD ISM Manufacturing PMI
Chart of the Day:
Oil 4 Hourly:
Click on chart to see a larger view.
Oil is looking to continue a move higher off it’s higher time frame bottom, after putting in what looks to me like a bullish flag.
However, price at the moment is sitting at channel resistance within the flag and shorts look the play short term. But if we get any strength on dips, I want to position myself for the breakout and rip higher. Keep an eye on the @VantageFX Twitter feed for any updated charts as price action on this setup unfolds.
Dane Williams – @VantageFX
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