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Grexit 'no longer out of the question' for Merkel

Hello Fellow Traders,


On this week (June 14 - June 20) we have 6 tradable releases:

-–––—————   Tuesday, June 16   —————–––-

UK   CPI   4:30am NY time   FNG + DTS   

-–––—————   Wednesday, June 17   —————–––-

USA   Interest Rate   2:00pm NY time   FNG   
New Zealand   GDP   6:45pm NY time   FNG   

-–––—————   Thursday, June 18   —————–––-

UK   Retail Sales   4:30am NY time   FNG + DTS   
USA   Core   CPI   8:30am NY time   FNG   

-–––—————   Friday, June 19   —————–––-

Canada   Core Retail Sales   8:30am NY time   FNG + DTS   


The Case For Staying Short EUR/USD Into FOMC - Barclays

In its weekly FX note to clients today, Barclays Capital advises clients to stay short EUR/USD going into this week's FOMC meeting.

The following is Barclays' rationale behind this argument along with the details of its current short EUR/USD position.

USD into FOMC:

"Markets will pay close attention to the tone of the FOMC statement on Wednesday and watch for hints on the timing of the first rate hike. Given the recent pickup in US consumption and labor market data, we think the Fed is likely to maintain its view that the winter slowdown was transitory and that the economy is likely to expand at a moderate pace. Indeed, the pace of job growth has picked up, with payrolls rising 280K in May, and the Fed’s LMCI has increased since the April meeting. Additionally, we expect the Fed to reiterate that inflation will gradually rise toward the 2% target in the medium term as the labor market continues to improve and inflation expectations remain stable," Barclays clarifires.

"Indeed, CPI data on Thursday, along with the latest import price data, should support our view that downward pressures on domestic core inflation from the lagged effects of USD appreciation will begin to wane going into the third quarter. As such, we continue to think the Fed is on track to hike twice this year (at the September and December meetings)," Barclays projects.

"Overall, we believe that the FOMC statements, along with CPI and other macro data, should support the USD," Barclays argues.

EUR amid Greek Uncertainty:

"Greek political uncertainty remains high, as the gap in negotiations between Greece and the Institutions remains substantial. The IMF is reported to have walked away from talks with Greek officials on Thursday because of the inability to find agreement on such issues as pension and tax reforms. Meanwhile, the economic and financial situation is continuing to deteriorate in Greece, with the state revenue shortfall having grown €1bn in May to reach a total of €2bn, and with the ECB having last week raised the limit on the Emergency Liquidity Assistance (ELA) to Greek banks by a further €2.3bn, to €83bn. The Eurogroup and ECOFIN meetings will be held on 18 and 19 June, respectively," Barclays notes.

It will be interesting to see how world will look like when such huge money will be dump into economy  ;D

With $21 Trillion, China’s Savers Are Set to Change the World

Few events will be as significant for the world in the next 15 years as China opening its capital borders, a shift that economists and regulators across the world are now starting to grapple with.
With China’s leadership aiming to scale back the role of investment in the domestic economy, the nation’s surfeit of savings -- deposits currently stand at $21 trillion -- will increasingly need to be deployed overseas. That’s also becoming easier, as Premier Li Keqiang relaxes capital-flow regulations.
The consequences ultimately could rival the transformation wrought by the Communist nation’s fusion with the global trading system, capped by its 2001 World Trade Organization entry. That stage saw goods made cheaper across the world, boosting the purchasing power of low-income families at the cost of hollowed-out industries.
Some changes are easy to envision: watch out for Mao Zedong’s visage on banknotes as the yuan makes its way into more corners of the globe. China’s giant banks will increasingly dot New York, London and Tokyo skylines, joining U.S., European and Japanese names. Property prices from California to Sydney to Southeast Asia already have seen the influence of Chinese buying.
Other shifts are tougher to gauge. International investors including pension funds, which have had limited entry to China to date, will pour in, clouding how big a net money exporter China will be. Deutsche Bank AG is among those foreseeing mass net outflows, which could go to fund large-scale infrastructure, or stoke asset prices by depressing long-term borrowing costs.


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