Happy dragon boat day to all our chinese viewers.

 

 

 

 

 

 

 

 

 

 

Europe seems to be a rosier place – for now – with market focus swinging to economic performance and expectations of more QE both of which are undermining the dollar near term. US data continues to soften as the current QE2 programme comes to an end which is driving US yields to historical lows as the street evaluates the potential for QE3.
The Dow is coming off its first 5-week losing streak since 2004, and the Dow and S&P 500 experienced their biggest one-week drops last week since August. The major averages all come off their lowest closes since March.

There's very little in the way of economic data or earnings to sway investors one way or the other as the new week begins. The US markets won't get any reports of significance until Wednesday, when the Federal Reserve releases its beige book.
European data on the other hand is holding up well and as we approach Thursdays ECB meeting Trichet is expected to use the “vigilance” flag which would herald a July rate hike.

Greece will be in focus once again today, as new austerity measures are imposed in an effort to win a new international bailout. As trader expectations of a new bailout deal increase, the euro is near a one-month high this morning, also boosted by the likelihood of a new European Central Bank rate increase later this week.

The oil markets, always in focus, will get even more time in the spotlight this week as OPEC begins a meeting in Vienna. Saudi Arabia and others are expected to push for a supply increase in an effort to support world economic growth by pushing prices lower.

We have just seen the press conference from the UK chancellor George Osborne and acting IMF head John Lipsky as the former IMF Strauss-Kahn prepares for his court hearing on rape charges in NYC. Comments of interest where

• UNEXPECTEDLY WEAK UK GROWTH AND HIGH INFLATION NOT A REASON FOR GOVT TO ADJUST MACROECONOMIC POLICY
• IF THERE IS PROLONGED PERIOD OF WEAK GROWTH AND LOWER INFLATION, UK WOULD NEED TO CONSIDER MORE QE OR TEMPORARY TAX CUTS

Comments was pretty dovish as most expected of the back of this sterling continues to slide toward 1.6350 and driving GBP lower against the EUR looking at above 0.89

Euro/$ a pop below 1.4600 met once again with real money and macro dollar supply.