Risk appetite has suffered at the start of this week, as the market grows more and more concerned about Greece's ability to secure the next instalments of funding from the EU/IMF, and greater speculation of a default swirls. Greek Prime Minister Papandreou cancelled a planned visit to the US in response to the growing domestic tension, as talks with the troika to release the next tranche of funding continue. Confidence was not helped by comments from US Secretary Geithner last week suggesting that bigger EU economies should be ring-fenced from the crisis - an idea that casts doubt on the conviction from European officials that they can and will fight to keep Greece afloat and keep within the Eurozone.
Given the unhappy state of the Eurozone debt crisis, EURUSD has hit a low of 1.3646 today, and Asian equity indices are almost all in the red. The Hang Seng is -2.3% on the day, and Shanghai Composite -1.3%. Due to the public holiday in Japan, the Nikkei is closed but if these losses extend into the European and US open then Japanese stocks are no doubt likely to play catch-up once the holiday period is over.
In other news, New Zealand's Q3 Westpac consumer confidence figure was this morning and remained unchanged at 112.0; given the deterioration in outlook and confidence elsewhere, this stable reading is actually rather impressive. Nevertheless, the RBNZ is unlikely to be swayed into hiking during the present uncertainty, so it is unsurprising that NZDUSD was not significantly affected by the release. Investor focus should now shift to the Q2 GDP release due on Thursday; a modest 0.5% quarterly rise is expected.
Coming up the data calendar is very light, with only Eurozone Construction output and the US NAHB housing market index due.