Reflecting a greater share of sales to first-time buyers, the National Association of Realtors released a report on Thursday showing an unexpected increase in U.S. existing home sales in the month of June.

NAR said existing home sales climbed 1.1 percent to an annual rate of 5.57 million in June from a downwardly revised 5.51 million in May.

Economists had expected existing home sales to dip to 5.48 million from the 5.53 million originally reported for the previous month.

With the unexpected increase, existing home sales reached their highest level since hitting 5.79 million in February of 2007.

NAR chief economist Lawrence Yun said, "Existing sales rose again last month as more traditional buyers and fewer investors were able to close on a home despite many competitive areas with unrelenting supply and demand imbalances."

"Sustained job growth as well as this year's descent in mortgage rates is undoubtedly driving the appetite for home purchases," he added.

The report also said the median existing-home price was $247,700 in June, up 3.7 percent from $238,900 in May and up 4.8 percent from $236,300 in June of 2015.

Additionally, NAR said there were 2.12 million existing homes available for sale at the end of June, down 0.9 percent from 2.14 million at the end of May.

The unsold inventory represents 4.6 months of supply at the current sales pace compared to 4.7 months of supply in the previous month.

EUR/USD: 1.1000 (2.5bln) 1.1100 (748m) 1.1150 (500m)

USD/JPY: 104.00-20 (USD 500m) 105.80 (385m) 106.75 (700m) 107.00 (651m)

GBP/USD 1.3000 (GBP 605m)

USD/CAD 1.3175 (USD 397m)

NZD/USD 0.7200 (NZD 200m)

Manufacturing activity in the Philadelphia region fell slightly in July, according to firms responding to this month's Manufacturing Business Outlook Survey. Although the indicator for current general activity turned negative, indicators for new orders and shipments were positive. Employment was flat at the reporting firms this month. Firms reported higher prices paid for materials and other inputs in July, but prices received for manufactured goods were relatively steady. The survey's index of future activity improved slightly, and firms expect growth in new orders and shipments over the next six months.

The survey's broadest measure of manufacturing conditions, the diffusion index of current activity, fell from 4.7 in June to -2.9 this month. For nine of the past 11 months, this diffusion index has been negative (see Chart 1). Twenty-two percent of the firms reported an increase in activity, 3 points lower than last month, and the percent of firms that reported decreases rose from 20 to 25. Fifty-one percent of the firms reported steady activity this month, similar to the share that reported steady activity last month.

In the week ending July 16, the advance figure for seasonally adjusted initial claims was 253,000, a decrease of 1,000 from the previous week's unrevised level of 254,000. The 4-week moving average was 257,750, a decrease of 1,250 from the previous week's unrevised average of 259,000. There were no special factors impacting this week's initial claims. This marks 72 consecutive weeks of initial claims below 300,000, the longest streak since 1973.

- ECB sees rates remaining at present or lower levels for an extended period of time

- Sees ongoing recovery and rise in CPI

- ECB will monitor developments closely

- New staff forecasts will help ECB assess conditions

- Recovery to continue at moderate pace

- ECB still sees support from low oil prices

- Inflation to remain low in coming months

- Inflation should pick up later in 2016

- Early survey showed no major inflation impact from Brexit

- Will be monitoring for further Brexit influences

- If there are problems, ECB will use all instruments if needed

- Bank equity prices are of some significance for policy makers

*via forexlive

EUR/USD

Offers : 1.1050 1.1080 1.1100 1.1125-30 1.1150 1.1180 1.1200 1.1230 1.1250

Bids: 1.1000 1.0975-80 1.0950 1.0930 1.0900 1.0880 1.0850 1.0800

GBP/USD

Offers : 1.3270-75 1.3290-1.3300 1.3320 1.3350 1.3380 1.3400

Bids: 1.3220-25 1.3200 1.3180 1.3150 1.3120 1.3100 1.3080 1.3050

EUR/GBP

Offers : 0.8350 0.8370-75 0.8400 0.8425 0.8450 0.8470 0.8485 0.8500 0.8530

Bids: 0.8300 0.8285 0.8255-60 0.8230 0.8200 0.8150 0.8100

EUR/JPY

Offers : 118.00 118.30 118.50 119.00 119.50 120.00

Bids: 117.50 117.00 116.50 116.25 116.00 115.50 115.00

USD/JPY

Offers : 107.00 107.25 107.50 107.80 108.00 108.50

Bids: 106.55-60 106.40 106.20 106.00 105.80 105.60 105.30-35 105.00

AUD/USD

Offers : 0.7520 0.7550 0.7580 0.7600 0.7620 O.7635 0.7650-55

Bids: 0.7480 0.7450 0.7420 0.7400

"At today's meeting the Governing Council of the ECB decided that the interest rate on the main refinancing operations and the interest rates on the marginal lending facility and the deposit facility will remain unchanged at 0.00%, 0.25% and -0.40% respectively. The Governing Council continues to expect the key ECB interest rates to remain at present or lower levels for an extended period of time, and well past the horizon of the net asset purchases.

Regarding non-standard monetary policy measures, the Governing Council confirms that the monthly asset purchases of €80 billion are intended to run until the end of March 2017, or beyond, if necessary, and in any case until it sees a sustained adjustment in the path of inflation consistent with its inflation aim.

The President of the ECB will comment on the considerations underlying these decisions at a press conference starting at 14:30 CET today".

"No additional stimulus; focus on UK referendum, Italian banks. We don't expect the ECB to deliver any new monetary policy stimulus this week (21 July). Instead, the UK vote to leave the EU will likely be the key focus, while the issues in the Italian banking system are likely to feature highly as well. The ECB will also have an opportunity to comment on the first TLTRO2 auction (results announced on 24 June) and on its Eurozone Bank Lending Survey for Q2, which will be released on 19 July.

Extension of QE beyond March 2017 seems increasingly likely. While the ECB is likely to argue that the UK vote to leave the EU increases the downside risk to growth and inflation, we do not expect it to deliver substantial monetary easing on 21 July. Instead, we expect the ECB to maintain its 'wait and see' mode and continue to focus on the implementation of its measures from March. Nevertheless, we think the to-be-expected deceleration in Eurozone growth will likely skew the ECB's decision further towards an extension of asset purchases beyond March 2017, with a decision likely due on 8 September or 8 December. In other words, we consider it rather unlikely by now that the ECB would switch off QE in April 2017

EUR will focus on the ECB's overall signal for direction. Most of the solutions to enlarge the pool of assets available for purchase could result in steeper curves. But, as we discuss, the link between curve steepness and EUR/USD direction is tentative at best. Instead, what matters for the currency is the overall monetary policy signal and whether it leads to a higher level of EUR rates.Market is already quite dovishly positioned, which may imply upside EUR risks

As we discuss, the market is likely already assigning a non-trivial probability to outcomes that lead to a drastic increase in the pool of assets. This has dragged the level of rates lower and equates to a dovish signal. In the absence of strong evidence to this end, however, we think the risks seem to be skewed to the upside for the EUR heading into the ECB meeting on Thursday".

- Greek debt payments must be affordable within Greece's economic situation

EUR/USD: 1.1000 (2.5bln) 1.1100 (748m) 1.1150 (500m)

USD/JPY: 104.00-20 (USD 500m) 105.80 (385m) 106.75 (700m) 107.00 (651m)

GBP/USD 1.3000 (GBP 605m)

USD/CAD 1.3175 (USD 397m)

NZD/USD 0.7200 (NZD 200m)

Public sector net borrowing (excluding public sector banks) decreased by £2.3 billion to £25.6 billion in the current financial year-to-date (April to June 2016), compared with the same period in 2015.

Public sector net borrowing (excluding public sector banks) decreased by £2.2 billion to £7.8 billion in June 2016, compared with June 2015.

Public sector net debt (excluding public sector banks) at the end of June 2016 was £1,620.7 billion, equivalent to 84.0% of gross domestic product (GDP); an increase of £47.6 billion compared with June 2015.

Central government net cash requirement decreased by £0.9 billion to £24.8 billion in the current financial year-to-date (April to June 2016), compared with the same period in 2015.

Due to the volatility of the monthly data, the cumulative financial year-to-date borrowing figures provide a better indication of the progress of the public finances than the individual months.

The data presented in this bulletin presents the latest fiscal position of the public sector as at 30 June 2016 and does not reflect any significant impact of the EU Referendum result announced on 24 June 2016. Estimates for the latest period always contain a substantial element of forecast information which currently reflect pre-referendum assumptions.

The volume of retail sales in June 2016 is estimated to have increased by 4.3% compared with June 2015.

The underlying pattern in the quantity bought, as suggested by the 3 month on 3 month movement, increased by 1.6%.

Compared with May 2016, the quantity bought in the retail industry is estimated to have decreased by 0.9%.

Average store prices (including petrol stations) fell by 2.5% in June 2016 compared with June 2015.

The amount spent in the retail industry decreased by 0.9% compared with May 2016, and increased by 1.5% compared with June 2015.

The value of online sales increased by 14.1% in June 2016 compared with June 2015, and increased by 0.5% compared with May 2016.

At 09:00 GMT France will hold an auction of 10-year bonds

At 11:45 GMT ECB's decision on the interest rate

At 12:30 GMT the ECB Press Conference

EUR/USD

Resistance levels (open interest**, contracts)

$1.1226 (3887)

$1.1154 (1722)

$1.1101 (704)

Price at time of writing this review: $1.1028

Support levels (open interest**, contracts):

$1.0955 (3014)

$1.0898 (4048)

$1.0862 (6978)

Comments:

- Overall open interest on the CALL options with the expiration date August, 5 is 37870 contracts, with the maximum number of contracts with strike price $1,1200 (3887);

- Overall open interest on the PUT options with the expiration date August, 5 is 49314 contracts, with the maximum number of contracts with strike price $1,0900 (6978);

- The ratio of PUT/CALL was 1.30 versus 1.32 from the previous trading day according to data from July, 20

GBP/USD

Resistance levels (open interest**, contracts)

$1.3505 (1486)

$1.3408 (1985)

$1.3311 (947)

Price at time of writing this review: $1.3229

Support levels (open interest**, contracts):

$1.3180 (460)

$1.3085 (1450)

$1.2989 (1665)

Comments:

- Overall open interest on the CALL options with the expiration date August, 5 is 24783 contracts, with the maximum number of contracts with strike price $1,3400 (1985);

- Overall open interest on the PUT options with the expiration date August, 5 is 24224 contracts, with the maximum number of contracts with strike price $1,2950 (2659);

- The ratio of PUT/CALL was 0.98 versus 0.97 from the previous trading day according to data from July, 20

* - The Chicago Mercantile Exchange bulletin (CME) is used for the calculation.

** - Open interest takes into account the total number of option contracts that are open at the moment.

"Market focus will be on Draghi's first press conference after finding out about the Brexit vote.

Forecasts are not expected to be updated at this meeting so markets will have to wait until September until any change in policy but the tone will be closely watched. Inflation expectations as measured by the 5y5y swap have bounced to 1.35% from the lows of 1.25% last week but are still not expecting inflation to reach 2% for more than a decade. The ECB should be focused on financial market and banking stability which is addressed via LTRO facilities. Note that yesterday's release of the ECB Bank lending survey, while mostly done before the Brexit referendum, was quite upbeat about credit suggesting that LTROs had improved bank profitability. The equity markets may disagree, having fallen 17% since the March ECB meeting, but we do expect the ECB to acknowledge relatively calm market post the Brexit vote. Draghi could acknowledge that there will be business uncertainty after the Brexit vote, which if translates into lower growth and inflation, would require further easing

What would make EUR move lower?

If Draghi reverses his statement from March, now saying that interest rates could be cut further then it would weaken EURUSD on the day but only lastingly weaken the currency if there are expectations of more than a 20bp cut.

Suggestions of an extension of QE won't be able to weaken the EUR as further corporate bond purchases would not be able to bring down long term government bond yields sufficiently. Rates investors will be watching for any clues on how the ECB could tweak current government bond purchase programme rules to allow for any extension of QE without hitting bond availability limits, though this type of discussion could likely be left until the September meeting.

We are now forecasting EURUSD towards 1.18 by the end of this year and are still long EURGBP".

The Reserve Bank of New Zealand said monetary policy will continue to be accommodative and further policy easing will be required to ensure that future average inflation settles near the middle of the target range.

Headline inflation is being held below the target band by continuing negative tradables inflation, the bank said Thursday.

The bank noted that the high exchange rate is adding pressure to the dairy and manufacturing sectors, together with weak global inflation, is holding down tradable goods inflation.

This makes it difficult for the bank to meet its inflation objective. "A decline in the exchange rate is needed," the bank said.

RBNZ observed that despite rising capacity pressures and some recent increase in fuel prices, the stronger currency implies that the outlook for inflation has weakened since the June Statement.

Australia's non-mining recovery remains on track according to the June quarter NAB Business Survey.

Leading indicators also suggest the outlook remains positive, although momentum has eased a little. Despite that, firms are continuing to suggest quite strong investment intentions for the next 12 months, consistent with the steady rise in capacity utilisation rates, while near-term employment intentions improved and longer-term employment intentions remained relatively solid. Inflation measures in the Survey remained subdued, which may point to another soft CPI outcome for Q2, while inflation expectations for the next 3 months point to a continuation of this trend.

The NAB Quarterly Business Survey provides valuable insight into Australian business, and offers a more in-depth probe into the conditions facing Australian business than the monthly survey, and also provides extra information about how firms perceive the outlook for their respective industries. Business conditions improved a little further in the June quarter, rising 1 point to +11 index points, which is well above the long-run average - largely supported by very high trading conditions and profits. According to NAB Group Chief Economist Alan Oster, "firms were still reporting business conditions consistent with an ongoing recovery in the non-mining sector". "There was a slight moderation in business confidence, but given the build-up of economic and political uncertainties since the start of the year, this is still a good result", said Mr Oster. "Additionally, the Monthly NAB Business Survey actually suggested business confidence lifted towards the end of the quarter."

Japan's all industry activity dropped for the first time in three months in May, the Ministry of Economy, Trade and Industry reported Thursday.

The all industry activity index slid 1 percent month-on-month in May, reversing a 0.8 percent rise in April. This was the first increase in three months but slightly slower than the expected drop of 1.1 percent.

Growth in construction activity slowed to 1.5 percent from 2 percent. At the same time, industrial production slid 2.6 percent, in contrast to a 0.5 percent rise in April.

Likewise, tertiary industry activity declined 0.7 percent, offsetting a 0.7 percent rise in April.

On a yearly basis, all industry activity climbed 0.5 percent in May in contrast to April's 0.2 percent decrease.

(pare/closed(GMT +3)/change, %)

EUR/USD $1,1009 -0,07%

GBP/USD $1,3234 +1,04%

USD/CHF Chf0,9871 +0,16%

USD/JPY Y107,20 +0,99%

EUR/JPY Y118,02 +0,92%

GBP/JPY Y141,89 +2,02%

AUD/USD $0,7471 -0,47%

NZD/USD $0,6965 -1,29%

USD/CAD C$1,3072 +0,40%

(time / country / index / period / previous value / forecast)

04:30 Japan All Industry Activity Index, m/m May 1.3% -1%

06:00 Switzerland Trade Balance June 3.79 3.49

08:30 United Kingdom PSNB, bln June -9.14 -9.2

08:30 United Kingdom Retail Sales (MoM) June 0.9% -0.6%

08:30 United Kingdom Retail Sales (YoY) June 6% 5%

11:45 Eurozone ECB Interest Rate Decision 0% 0%

12:30 Eurozone ECB Press Conference

12:30 Canada Wholesale Sales, m/m May 0.1% 0.2%

12:30 U.S. Continuing Jobless Claims 2149 2145

12:30 U.S. Initial Jobless Claims 254 265

12:30 U.S. Philadelphia Fed Manufacturing Survey July 4.7 5

14:00 U.S. Existing Home Sales June 5.53 5.48