20. August 2012, 12:33

Morning Call vom 20.08.2012 von Michael Hewson, FX-Analyst von CMC Markets

Greece back at centre stage this week
By Michael Hewson (Senior Market Analyst at CMC Markets UK)

It wouldn?t be a weekend if there weren?t the usual conflicting stories coming from Europe about Greece?s future in the Eurozone.

On the one hand we have Jean Claude Juncker, head of Eurogroup insisting that Greece would only leave the Eurozone if the country ?totally refused? to implement any or all of its reform targets. On the other this somewhat contradicts the comments from German finance minister Schaeuble who insisted that there would be no other aid program, and that Greece would have to meet its obligations, which now appear to be much higher than previously thought, if reports out of Germany are to be believed.

According to these unconfirmed reports it would appear that from the latest troika mission it is estimated that Greece has a funding gap of ?14bn in each of the next two years, well above the ?11.5bn originally estimated. Given that the Greek government is already struggling to agree a budget of ?11.5bn worth of cuts, it is likely to be impossible for them to reach a target of ?14bn, and could potentially bring down his fragile coalition.

If these figures are accurate this week?s meetings of Eurogroup are likely to be very challenging, while the scheduled meeting to be held between Greek PM Samaras and German Chancellor Angela Merkel on Wednesday in Berlin is likely to merit particular attention, given that the Greek PM is likely to ask for an extension to the bailout terms. With other senior policymakers due to have series of meetings this week, we could well find that the European rumour mill is a little more fertile than normal.

Last week Greece was able to raise ?4bn worth of 3 month T-bills with which to fund a bond redemption of ?3.1bn due today for the ECB, however given that these bills were bought by Greek banks on the back of ELA funding from the ECB one wonders how this particular circular pass the parcel funding program can continue.

There?s also been a recycled story about the ECB potentially intervening to cap borrowing costs for struggling European countries by buying unlimited amounts of government bonds, however it does seem somewhat unlikely that they would be able to do this without Germany?s assent and given their fierce opposition to central bank funding of government?s being against the central bank?s mandate, it is hard to see how this would work in practice, unless there was strict irrevocable conditionality.

Later this week we have the latest batch of August manufacturing PMI data from Germany and France and they are likely to continue to paint a less than robust picture of economic activity in both those countries, with readings of sub 45 in both cases. We also have another revision of German Q2 GDP on Thursday which surprisingly showed growth of 0.3% in spite of very poor PMI data across all sectors for the quarter in question.

We also have a Q2 GDP revision for the UK economy which is likely to be revised upwards from the initial -0.7%, after economists badly misjudged the effect of the Jubilee bank holiday on the economy. The adjustment is likely to be in the region of 0.3% bringing the figure to -0.4%, still poor, but a lot better than initial estimates.

EURUSD ? last week?s failure to break below trend line support now at 1.2285 from the 1.2045 lows keeps the risk for a move back towards the 1.2400 area. On the topside the key resistance is still the 55 day MA at 1.2395 and resistance in the 1.2430/40 area. A move above 1.2440 targets 1.2570.
A break of the trend line support has the potential to retarget the 1.2150 area, as well as the 1.2045 lows.
The bullish weekly candle from two weeks ago still remains valid until such time as we break below 1.2045 so caution remains the watchword. A break below 1.2240 targets these lows and then 1.1880.
The key level on a monthly close remains the 200 month MA at 1.2060, the July lows.

GBPUSD ? it was wise to be cautious about Thursday?s close above the 200 day MA at 1.5725 as we subsequently closed below it on Friday. We need to overcome the 1.5780 level which is 50% of the 1.6305/1.5270 down move to precipitate a potential move to 1.5910. Intraday support can be found around the 1.5650/60 area.
A break below the trend line support at 1.5510 from the 1.5240 lows suggests a move back to 1.5240.
Only a close below 1.5240 signals a risk of a return to the July 2010 lows at 1.4950.

EURGBP ? the 0.7880 area continues to act as a cap to any euro rallies, while support remains around the 0.7820 area.
This area remains the key barrier to a test of the downside and previous lows at 0.7755.
A break of 0.7880 is needed to retarget the 55 day MA which remains strong resistance at 0.7945, along with trend line resistance at the same level from the February highs at 0.8505.

USDJPY ? last week?s close above the 200 day MA at 79.20 potentially sets up a move towards the weekly cloud resistance at 80.40, but we need to hold above 78.80 on an intraday basis. Below 78.80 reopens the downside and a return to the range lows and cloud support at 77.30 and the May lows at 77.60 remain a key level.

Equity market calls
FTSE100 is expected to open 2 points lower at 5,850
DAX is expected to open 19 points higher at 7,060
CAC40 is expected to open unchanged at 3,488
FTSEMib is expected to open 38 points higher at 15,163

Quelle: http://www.cmcmarkets.com

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