Markets Waiting On Greek Referendum

 | Jul 02, 2015 05:35AM ET

Market Brief

Markets are still focus on the Greek situation despite Eurozone finance ministers ruled out further talks with Greece’s government until the referendum that is scheduled to take place on Sunday. According to the latest GPO’s opinion poll published on Wednesday, 47.1% of voters will rather accept the term of the bailout while 43.2% will rather say “no”. The highly uncertain outcome is weighing on the single currency, dragging EUR/USD below the 1.11 threshold. EUR/USD has proven unable to break the strong support standing at 1.1067 (Fib 38.2% on May debasement). However, US June NFP are due this afternoon and will likely provide the small boost needed to break that support. The US economy is expected to have added 233k jobs during the month of June, while unemployment should print at 5.4%, according to the latest survey, from 5.5% a month earlier. However, given the current tense situation in Europe, we expect markets to show restraint in their reaction to upbeat data.

In the Asian session, equity returns are mixed this morning. South Korea’s KOSPI is taking advantage of a weaker KRW to add 0.45% while Japan’s Nikkei gained 0.95%. USD/JPY is gaining upside momentum and broke the 123.20 resistance (Fib 38.2% on May-June rally). However, the pair still needs to break the top of its declining channel (around 123.50-60) to validate a bullish momentum. In China, the stock market is going further south - the Shanghai Composite is down -4.40% and the Shenzhen Composite retreats -5.03% - despite regulator eases rules for brokerages margin trading in an attempt to end the “vicious cycle” of margin calls as falling prices are prompting more selling.