Ranges (Up till 12.33pm HKT) CurrencyCurrency

EURUSD1.1090-1.11525EURJPY135.40-136.835

USDJPY121.95-122.75EURGBP0.7150-85

GBPUSD1.5470-1.5533USDSGD1.3505-27

USDCHF0.9393-0.9415USDTHB33.94-34.00

AUDUSD0.7412-69USDKRW1129.0-1134.7

NZDUSD0.6701-53USDTWD30.96-31.23

USDCAD1.2668-1.2716USDCNH6.2142-85

AUDNZD1.1044-80XAU1161.5-1164.4

Key Headlines

With nothing out of Brussels on Greece, market focussed attention on China stocks. National Business Daily reported that total of 358 listed companies will reopen for trading today. This represents one quarter of the companies suspended from trading.

Shanghai opened in positive and continue to stay that way. Report in FT that Chinas securities regulator warned the local brokerage houses to stop opening their trading systems to lightly regulated fund-matching companies that distribute loans for leveraged stock bets that is securities lending. Eurozone meeting goes on and, according to the Greek officials, 2 sticky issues remained open. One is the IMF involvement on the program, the Greeks want smaller role for IMF and no IMF post-2016. No surprise, Greeks detest the IMF during the earlier Troika assessments. The other is this push by creditors for Eur50bn worth of Greek assets to be privatised and put in a fund, so as to repay the creditors. I read from one report that there was a proposal for Germanys KfW could manage the Greek assets. After 2 days of Summit and is still going on, Eurozone leaders and Finance Ministers have told Greece to implement the austerity measures within 72 hours or face effective expulsion from the single currency. The reforms set out must ratified by parliament by Wednesday July 15, otherwise no talks on a third rescue for Greece.

Eurozone also proposed that international creditors to work on the ground in Athens and have full oversight of draft legislation; possible transfer of 50bn in "valuable" Greek assets to external fund for eventual privatisation; possible talks on "swift negotiations on a time-out from the euro area, with possible debt restructuring" if a bailout is not agreed. There was a confidential draft, which said if there is not agreement reached, Greece should be offered swift negotiations on a time-out from Eurozone. FX FlowsAnother nervous Monday open with market looking out for Greek headlines. Euro ended Friday NY at 1.1160; pre-market traded to 1.1070, official Monday opening is at 1.1099 and Tokyo opened 1.1131. Eurozone meeting goes into late night wee hours of morning. Twitter reported 2 sticky issues remained in the discussions, market bought risk; EurJpy, EurUsd and AudJpy. EurUsd got up to 1.11525. Some banks have hinted sell orders up at 1.1180-1.1220, of course better higher. New Yorkers left the UsdJpy last week at 122.80 and pre-market traded to 121.93. UsdJpy has recovered since; by time Japanese walked in, Usd was back to 122.51. It was not surprising, given the Wall Street and yields of UST. Towards the late morning, speculators were adding on risk following the Brussel Tweets. With UsdJpy registering high 122.71 by midday, our trader Jon thinks bids will now reappear near 122.40 and could challenge the offers surrounding 122.85-123.00. It has been rather dull for the Australian dollar most of the time the AudUsd traded 0.7420-45. It was only into late morning that the AudJpy buying by Japanese bought the Aussie to sixties and then, backed away to 0.7438. Our trader Jon thinks Aud might test lower, given that this 0.7500 has failed to break. UsdCad traded higher in low volume. Market is now looking at BOC to cut rates this week on Wed from 0.75% to 0.50%. Not much orders are in the 1.26-handle; offers come in above 1.2760. In rates wise, think this UsdCad should bottom out lows 1.26s.AsiansDespite equities performing okay, Asian currencies were rather defensive. Market paid close attention to China and Greece, remarks from Fed Chairwoman Yellen causing a supported Usd. 1s UsdKrw NDF revisiting this 1130 again; not much to add except that the pair is tracking the UsdJpy. No agents mentioned in UsdMyr onshore but the Usd is having difficulty surfacing above 3.80. Some guys are keeping close watch on Weds release of June CPI, expecting the inflation to climb to 2.4% from 2.1% Y/Y. 1MDB drama subsiding with nothing concrete. Traders are staying on the side lines for now; not willing to challenge officials. Our trader Gary suggesting wait till 3.7250 to re-enter long. UsdSgd hovers around the 100-day SMA 1.3516 ahead of tomorrows GDP release. Technical challenge is the 1.3600 and 1.3475. One point is that SgdMyr is holding well, which deters sellers. Who said what

South Korea Park: Global uncertainty growing on Greece and China Greece Tsipras: May seek to expel Syriza Party rebels Japan MOF, BOJ and FSA to closely communicate on Greece French Officials: Denies report of bi-lateral Greece loan plan Netherlands: Worried about Greek rolling back on reforms MNI: Creditors closer on some issues, 2 remained open

MNI: EU considers new Greece compromise to secure ELA support

Greece: Still division over role of IMF and privatisation at Eurozone summit

China Customs: Pressure on exports still big coming 2-3 months

China Customs: Exports relatively severe in next 2-3 months

China Customs: External demand is major reason for weak China trade

China Customs: Exporters weakening competitiveness die to high cost

News & Data

New Zealand June REINZ House Sales Y/Y up 29.2% from 21.6% New Zealand June Food Prices up 0.5% from 0.4% China June Exports Y/Y rose 2.1% from -2.8% China June Imports Y/Y fell 6.7% from -18.1% China June Trade Balance Yuam284.2bn from Yuan266.8bn Japan May Final Industrial Production M/M fell 2.1% from -2.2%

Japan May Final Industrial Production Y/Y fell 3.9% from -4%

Japan May Tertiary Industry Index M/M -0.7% from -0.2%

Guardian Greek crisis: surrender fiscal sovereignty in return for bailout, Merkel tells TsiprasEuropean leaders have confronted the Greek government with a draconian package of austerity measures entailing a surrender of fiscal sovereignty as the price of avoiding financial collapse and being ejected from the single currency bloc. Under the terms set before Tsipras on Sunday night, the Greek parliament has to endorse the entire package on Monday and then pass several pieces of legislation by Wednesday, including on pensions reform and a new VAT regime, before the eurozone will agree to negotiate a new three-year rescue package.http://www.theguardian.com/business/2015/jul/12/greek-crisis-surrender-fiscal-sovereignty-in-return-for-bailout-merkel-tells-tsiprasTimes: Greece gets three days to make cuts or face exitEuropean leaders warned Greece last night to implement draconian austerity measures within 72 hours or face effective expulsion from the single currency. Alexis Tsipras, the Greek prime minister, has been given until Wednesday night to pass a swathe of laws after any lingering trust between Athens and Brussels ran out over the weekend.http://www.thetimes.co.uk/tto/news/world/europe/article4495774.eceKathimerini: Credit sector bracing for decision timeThe creditors plan for Greek banks provides for their recapitalization using between 10 and 25 billion euros, while deposits up to 100,000 euros will remain protected. Also, during the course of Monday, the government will issue a new legislative act extending the bank holiday for more days. Unless ECB extends the limit on emergency liquidity assistance (ELA) or the legislative act decreases the maximum amount of cash that can be withdrawn from the current 60 euros per person per day, there will not be enough cash to last until the end of the week.http://www.ekathimerini.com/199399/article/ekathimerini/business/credit-sector-bracing-for-decision-timeRoger Bootle in The Telegraph

Investors beware: Raising interest rates could still come as a shockWhat a time to be thinking about the outlook for interest rates. The world is beset with uncertainty not least about what will happen in Greece. Meanwhile, anxiety persists about the fall of the Chinese stock market and the underlying health of the American economy. Yet I have never known a time when commentators have said that the present conjuncture is unusually certain. Policy-makers and markets have to accept whatever form of uncertainty currently exists and just get on with the job.http://www.telegraph.co.uk/finance/economics/11735064/Investors-beware-Raising-interest-rates-could-still-come-as-a-shock.htmlLarry Summers in FT: Complacency and incrementalism are traps to avoidAgainst a backdrop of slow and diminishing growth forecasts, recent months and especially recent weeks have seen an extraordinary level of financial drama. While not rising to the level of the systemic global crisis of 2008, or the period of great uncertainty in the late 1990s around the Asia-Russia-Brazil-Long-Term Capital Management crises, markets everywhere seem to be thwarting political aspirations.http://www.ft.com/intl/cms/s/2/723359b0-2887-11e5-8db8-c033edba8a6e.html#axzz3fixAwELLFT: China cracks down on margin lending before markets reopen

Chinas securities regulator has moved to crack down on identity fraud and grey-market margin lending in the latest aggressive government measure to backstop the countrys tumbling stock markets. The regulator warned brokerages on Sunday night to stop opening their trading systems to lightly regulated fund-matching companies that distribute loans for leveraged stock bets flooding the market and amplifying the boom and bust cycle. Grey-market margin lending has provided as much as Rmb1tn ($160bn) in credit for leveraged stock bets. For some time, some institutions and individuals have employed information systems to open fictitious securities accounts for clients, using other peoples securities accounts or loaning out their own, the China Securities Regulatory Commission said.http://www.ft.com/intl/cms/s/0/5f28a750-286c-11e5-8613-e7aedbb7bdb7.html#axzz3fixAwELLThese information have been obtained or derived from sources believed to be reliable, but I make no representation or warranty as to their accuracy or completeness. Copyright 2013 The Poon Report by Vincent Poon. All rights reserved.