Good morning

	High	Low			High	Low
EUR/USD	1.0856	1.0784		USD/ZAR	12.2225	12.0900
GBP/USD	1.5131	1.5069		GBP/ZAR	18.44	18.26
EUR/GBP	0.7181	0.7152		USD/RUB	61.41	59.85
USD/JPY	122.03	121.17		USD/NGN	199.7	199.0
GBP/CHF	1.4950	1.4888		S&P 500	2,080	2,073
USD/ILS	4.0218	3.9925		Oil (Brent)	58.75	58.03

A rather “quiet” start to the week as sentiment remains muted post the rather electrifying NFP last Friday. Greece back in the spotlight as they failed to come to an agreement with her creditors yesterday on the proposed reforms and secure the bailout payment early. After giving in to Troika ahead of February’s deadline and seeing the fallout from the anti-austerity protesters, it would appear Syriza’s Tsipras is now trying to act tough. When will he understand that there is very little room to negotiate and Greece, like her EU partners are all in it together. The EU cannot be seen to pardon Greece while keeping the purse strings tightened with the rest. Reform is the answer. It is difficult we know, it is difficult to sell to your supporters we know, it takes years to see the results we know, but it seems Tsipras and his followers simply do not know and prefer to keep their blinkers on and face up to reality. The good times are gone. Stand up and accept reforms will happen or Greece will face bankruptcy and potential expulsion (not really an option). That will take decades to fix itself let alone years. Syriza announced in February a list of reforms and targets the EU/IMF were looking for. But as we now get into the nitty gritty of these reforms one wonders have they simply plucked the figures out of thin air and that Troika would not ensure they are carried out to the word. Tsipras is a virgin politician. In fact his party is made up of amateurs. I don’t think they know just how deep in the hole they are and hoping their inexperience will help them get some leeway from Troika. Unfortunately this will not happen. While a deal will happen one way or another, getting there will be fraught with pot holes and difficulties. What this space. Bottom line the ultimate winner as usual is the USD. Trading UNDER 1.08 in Asia EURUSD is once again on a cliff’s edge. As PARITYFX has written many times since the beginning of January, EURUSD IS GOING THROUGH PARITY WELL BEFORE THE END OF 2015. I HAVE WRITTEN Q3, but at this stage it could be the summer holiday gift. 

Chinese inflation data was released overnight. While consumer prices rose by 1.4% in February, well ahead of expectations and a hefty jump from the January reading, PPI fell much further than expected, by 4.8%. With the PBoC targeting 3% CPI levels, on the face of it this reading was an anomaly and the PBoC will find it difficult to push ahead with that target. There are simply too many negative factors affecting the Chinese economy right now and will simply have to continue cutting rates and adding QE to straighten the economy.

Gov. Carney will appear before the Lord’s Economic Affairs Committee in London this afternoon. We reckon the Gov. will simply repeat what we know already about CPI, GDP, and more importantly interest rates. We have noted many times in this commentary, the Fed will beat the BOE to be the first major central bank to raise interest rates. We suspect and predict the FED will act in JUNE. The BOE is likely to follow suit with SEPTEMBER being my bet. More importantly WHO WINS THE ELECTIONS IN MAY!!! A labour Govt. will see the GBP fall off the cliff. That could add a few grey hairs to the Gov. With lower CPI driven by falling oil and food prices, the Gov. is hoping to see a continuation in wages, thus creating inflationary pressures. The BOE may decide to raise rates even if current inflation is well below target.

Other key points: (1) The USD index continues to edge higher reaching its highest level since 2003, (2) USDILS continues to trade above NIS4.00 AS PREDICTED BY PARITYFX post the BoI meeting, (3) AUDUSD finally gave in and kicked the bucket after rising post NFP to 0.7825. We still expect the RBA to make another cut, probably on the 5th May thus giving itself time to see how the February cut worked

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