NFP Friday and a Greek Bundle Request

Morning View: The big European story out of Greece? Not this morning, as IMF head Christine Lagarde weighed in on US monetary policy during a press briefing in Washington overnight.

“The inflation rate is not progressing at a rate that would warrant, without risk, a rate hike in the next few months.”

“That means the Fed should wait until early 2016, even if there’s a risk of slight over-inflation relative to the central bank’s 2% target.”

With Janet Yellen and the Fed still moving down the data dependent path to rate hikes most likely starting in December, she agrees with Lagarde’s comments re inflation but has stated over and over her ‘reasonable confidence’ that inflation will come back down towards 2% where it needs to be.

Nothing is changing.

But no, we can’t have a morning report without mentioning Greece somewhere along the way and today is no different.

Greece has now informed the IMF that they will not be able to make this week’s €321 million payment. They have instead asked to bundle it into one €1.5 billion payment at the end of the month.

EUR/USD Daily:

EUR/USD 4 Hourly:

Well in to anyone who was shorting that top into resistance. Stepping in front of the steamroller like that following the momentum behind the rally we have been seeing lately would have took guts. But it’s all about levels that you can manage your risk around and I know plenty of you jagged it with good trade management.

The request to bundle payments is a game changer in that for the first time, this is Greece actually not doing what was asked of them. There was no sideways deal from the IMF, this was Greece putting it off.

They won’t get many chances like this.

On the Calendar Today:
Quiet one in Asia with no tier 1 data on the calendar. It’s all about NFP during the US session with NY Fed’s Dudley due to speak a few hours later in Minneapolis which could see some interesting questions asked if we get a big miss either way.

Friday:
USD OPEC Meetings

CAD Employment Change
CAD Unemployment Rate
USD Non-Farm Employment Change
USD Unemployment Rate
USD FOMC Member Dudley Speaks

Chart of the Day:

SPI200 Daily:

With the 6000 level now long gone, the Australian market broke through major support at 5560 yesterday, showing good momentum in it’s follow through to close on it’s daily lows.

SPI200 Monthly:

What looks like a big deal on the daily is shown on the Monthly chart as a healthy correction that a market in an up trend needs to have. Always good to use that chart with the GFC carniage on it for some perspective when we get some bearish days.

Finally, just a heads up that there will be no Asian Session Morning blog on Monday as I’m out of the office due to the Queen’s Birthday long weekend.

For one day a year the colonies still love you. God Save the Queen!