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Risk appetite firmer in Asia on hopes for a more stable EU periphery In the aftermath of the Greek vote, Asia traded mixed at the start with a quick peek above the overnight high in EURUSD running out of steam and retracing some 50 points. However, greater risk appetite and firmer Asian equities soon saw a re-test of highs, and beyond. Stops through 1.4490 accelerated a move above 1.45 to 1.4518 and after that it was in consolidation mode. There was no specific news to drive the move apart from the risk appetite story. Month-end portfolio hedging flows will likely make for a volatile/confusing session though indicators are not particularly strong this month given the relatively flat month for global equities. Generally, consensus appears to mildly favour the USD and shun the more risk-focused currencies. On the data front, the European session is a busy one with German retail sales and unemployment, UK house prices, Sweden household lending and Euro-zone money supply and CPI all on tap while Norway’s retail sales completes the picture. We also have at speech from ECB’s Trichet at the European parliament. The North American session features Canada’s monthly GDP, weekly US jobless claims, Chicago PMI and the weekly Bloomberg consumer comfort index.  We also have late speeches from Fed’s Bullard and Hoenig. It was a volatile session for the EUR yesterday as rumour and counter-rumour for and against the Greek austerity vote did the rounds. Once the successful vote was announced (155-138 margin), EUR failed to rally past the earlier high suggesting that this outcome was more-or less expected and already priced in. Escalating rioting by protestors during the vote may have also had some input in capping the pair’s rally and now we face the implementation vote tomorrow. Aside from the Greek affair, UK data gave further indication of a slowing economy and a consumer unwilling to increase household balance sheets. The index of services slid 1.2% m/m while consumer credit rose a less-than-expected £0.2 bln. As a result GBP underperformed relative to its peers and EURGBP was back at levels last seen on May 5. Across in North America, Canada’s inflation rate hit an 8-year high which brought forward Bank of Canada rate hike expectations and gave support to the CAD. US pending home sales recouped some of last month’s heavy losses with an 8.2% m/m increase. Wall St enjoyed its third up-day in a row, the best such move in 3 months, to the detriment of US bond markets with 10-year yields ticking back up to 3.11% as a result but this failed to pull USDJPY through the 81.0 mark. Economic Data Highlights

• CA May CPI out at +0.7% m/m, +3.7% y/y vs. 0.3%/3.3% expected and 0.3%/3.3% prior resp.
• US Weekly MBA Mortgage Applications out at -2.7% vs. -5.9% prior
• US May Pending Home Sales out at +8.2% m/m vs. 3.0% expected and revised -11.3% prior
• NZ May Building Permits out at +2.2% m/m vs. 3.2% expected and revised -1.2% prior
• UK Jun. GfK Consumer Confidence out at -25 vs. -24 expected and -21 prior
• JP Jun. Markit/JMMA Manufacturing PMI out at 50.7 vs. 51.3 prior
• AU May Rismark House Prices out at -0.5% m/m vs. revised -0.3% prior
• NZ Jun. NBNZ Activity Outlook out at 38.7 vs. 39.7 prior
• NZ Jun. NBNZ Business Confidence out at 46.5 vs. 38.3 prior
• AU May Job Vacancies out at -4.5% q/q vs. -1.7% prior
• AU May Private Sector Credit out at +0.3% m/m, +3.1% y/y vs. 0.4%/3.2% expected and flat/3.3% prior resp.
• JP May Construction Orders out at +25.5% y/y vs. 31.4% prior
• JP May Housing Starts out at +6.4% y/y vs. 3.1% expected and 0.3% prior

Upcoming Economic Calendar Highlights (All Times GMT)

• GE Retail Sales (0600)
• UK Nationwide House Prices (0600)
• EU ECB’s Trichet to speak (0700)
• Sweden Household Lending (0730)
• GE Unemployment Rate (0755)
• EU Euro-zone M3 Money Supply (0800)
• Norway Retail Sales (0800)
• EU Euro-zone CPI Estimate (0900)
• CA Apr. GDP (1230)
• US Initial Jobless Claims (1230)
• US Chicago PMI (1345)
• US Bloomberg Consumer Comfort Index (1345)
• US Fed’s Bullard to speak (1400)
• US NAPM- Milwaukee (1400)
• US Fed’s Hoenig to speak (1700)

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