Australia: The EU approved a new loan package of EUR12bn for Greece to cover maturing obligations in mid-July. This was expected after the Greek Parliament passed a variety of austerity measures last week but all agree further work still needs to be done. All financial markets were buoyed by the better PMI data in the US which saw the index rise to 55.3 from the previous month of 53.4 and higher than the 52 expected.

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European and US equity markets moved higher on the figure with the Dow and S&P 500 both up 1.4%. Oil was off slightly to US$95 a barrel for WTI crude and US$112 for Brent crude. With safe haven concerns lessening, gold fell slightly to US$1,488 an ounce. The AUD remained firm on Friday afternoon after China’s PMI data for June was released which was slightly lower than expected but still at an expansionary level of 50.9.

Anything over 50 indicates continued growth. Most analysts still expect the Chinese economy to expand at level of 9.3% in Q2 yoy, a result that is likely to keep the AUD firm. Today in Australia, the release of job ads for June, building approvals and retail sales for May will give us an indication of how the local economy is travelling. Last month job ads fell by 6.5% from the
previous month while building approvals were down 1.3% mom and retail sales were up 1.1%.

Majors: The EUR continued its strength against the USD as the Greek dramas eased although EU and German PMI data for June were flat when compared to the US data. The UK PMI data for June disappointed as well which pushed the GBP lower and helped the AUDGBP to a new 26 year high of over 0.6700 All AUD cross rates remain very firm but we expect
very little movement today as the US celebrates today their July 4 Independence Public Holiday which will see all US markets closed.

Have a good day.

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