Market News

U.S. bond yields may have risen last week, but bond traders are not pleased with the IMF’s posture to put off interest rate hikes till 2016.

After the US Labor Department reported last week that new private sector jobs hit 280,000 in the month of May, the US Dollar edged to a 13-year peak versus the Japanese Yen.

While most eyes will be focused on the G7 meeting taking place in the Balkans Monday, some investors are watching Asia's two largest economies, Japan and China, both of which are scheduled to release much data over the course of the coming week.

This could be a very quiet week for the Forex market, with little on the agenda. The headlines are likely to be dominated by the G7 meeting on Monday, and key data from New Zealand, Australia and the U.S.A. on Thursday.

The Seven (G7) Summit of industrial nations will meet on Sunday in the Bavarian Alps but the focus will almost certainly be on Greece’s debit crisis.

The International Monetary Fund released its report Thursday recommending that the U.S. Federal Reserve should push off a rate hike until the first half of 2016 when a strengthening in inflation and wages has stabilized.

Yutaka Harada, the newest board member on the Bank of Japan’s policy committee, said that the Yen has finally arrived at a “pretty good place” given the recent declines.

European Central Bank President Mario Draghi sent euro governments into a tither Wednesday with his announcement that there would not be an earlier-than-expected end to its bond-buying plans.

Ahead of the European Central Bank’s decision, which will be keenly watched by investors and analysts alike, the Euro paused from its latest rally which took the common currency more than 2% higher versus the US Dollar.

At an emergency meeting Tuesday, Greece’s creditors outlined yet another agreement to help the leftist government in Athens put its country out of its dire financial situation.

This morning’s release of CPI figures from the Eurozone was an unexpected and welcome surprise for Euro bulls. According to Eurostat, May’s personal inflation or CPI reading, though preliminary, rose to 0.3% against expectations of a rise to 0.2% from 0.0% in April.

There were no surprises when Australia’s Central Bank Governor Glenn Stevens and his board left its key interest rate unchanged Tuesday at a record low of 2.0. Despite the decision, the Australian dollar continued to rise.

As had been largely expected, the Greek government was unable to meet a deadline for an agreement with lenders to release additional aid. Without that funding, it is highly unlikely that Greece will be able to make its next IMF payment which comes due on June 5th.

Greece is no closer to reaching a deal with its creditors with each side pointing to the other as the reason for the failure.

There is quite a lot of data coming out this week, which should be dominated by USD news (in particular, Friday’s NFP report) and also to a lesser extent statements by the central banks of the Eurozone, the U.K., and Australia. However it seems very unlikely there will be any surprises from the central banks so all eyes will be on the USD data.