After everything we’ve spoken about leading into last night, and the importance that markets, let alone the Greek people, are placing on these meetings, we get headlines flashing across the wires such as this:
“Senior officials say there’s been a mix-up with the documents sent to the bailout monitors.”
We then see follow up quotes trickling through like this:
“It’s not so dramatic, but they sent the wrong one by mistake.”
What makes it even more hilariously incompetent is that this isn’t the first time that the wrong documents have been sent through from the Greek side! Oh but you’re probably right guys, this isn’t all that important anyway. We all know we’re still going to be here for a while yet.
After the 11 page proposal… well the right one… was eventually received, the terms on which Greece were willing to move on were known. Greece has accepted that its pension system needed to be reformed, and said it would save money by decreasing pension contributions, health payments by retirees and a new tax on businesses.
This has always been the biggest sticking point as Tsipras was elected on the promise that Greece would not bow to European demands for cuts that would hurt citizens the most. Tsipras seems to have found a slight loophole by leaving pension rates untouched which allows him to say that he has fulfilled his mandate to the people. Greece has also set a higher VAT rate and agreed to continue to push for GDP targets.
If final approval is given, a deal would be signed by European leaders when they meet for a two-day summit in Brussels on Thursday.
“My aim is a deal by the end of the week.”
Look at the 5 minute chop that we’ve been expecting. Once more, don’t get caught up trading headlines!
On the Calendar Today:
HSBC Flash Manufacturing data out of China is the big one during the Asian session but with Sydney house prices an ever present concern for the RBA, it’s probably worth keeping an eye on the House Price Index reading out of Australia just beforehand.
Again Greek headlines will drive Europe rather than these PMI’s until we reach the US session.
CNY HSBC Flash Manufacturing PMI
EUR French Flash Manufacturing PMI
EUR German Flash Manufacturing PMI
USD FOMC Member Powell Speaks
USD Core Durable Goods Orders
Chart of the Day:
Look at these AUD/NZD charts… 1300 pips from parity in only a few weeks!
Crazy to look back in our Vantage FX News Centre Technical Analysis posts on the way down and playing for a break out below. We got a bit of a push down, but we sure didn’t get the break. By that stage I thought that I’d missed the boat on my chance to get long with good risk:reward. I’m happy with my reasons for making that call at the time, but of course it’s frustrating to see a move like that off a juicy level.
Similar to the GBP/USD chart of the day in yesterday’s Morning Blog, we have a chart that has gone parabolic. A vertical line straight up and now into a resistance zone.
One of my favourite sayings in trading is:
“There is no such thing as overbought or oversold.”
I’m not even going to put a stochastic indicator on my chart, I can see that the reading would have told me to sell weeks ago. But charts like this are strong for a reason. Don’t jump into shorts for the sake of it.
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