Traders Searching for Clues on Greece, Awaiting NFP

Ranges are tight in Asia-Pacific trading as the yen leads and sterling lags. The euro regained 1.4500 but was unable to break the US session high of 1.4519 and has now fallen back to 1.4485. The European session should feature more clarity on the Greece and services PMIs for Europe and the UK.

The looming release of non-farm payrolls is keeping the market in check so far in Friday trading. There is a slight risk off tone as the yen makes small, broad gains but the overall moves have been minor. Data flow has been light. New Zealand building consents fell 1.6% in April, far short of the +2.0% expected. NZD edged lower but was buoyed by the seasonally adjusted number of new dwellings, which rose 3.6%. The May Monster.com jobs Index fell 2 points to 143 compared to 145 in April. The change is small but adds another small negative bias to Fridays NFP report. China's industrial output will likely grow 13.5% in H1, according to an official cited in the China Securities Journal. This is a slower pace than the 14.2% expansion in the first four months. The report has helped to elevate global growth concerns.

In the hours before NFP, European traders will be focused on gleaning some clarity on potential Greek bailouts. Reuters on Thursday reported funding plans through mid-2014 while MNI said an agreement is close that could provide Greece with new financing to meet funding gaps expected to arise in 2012 and possibly 2013. There is talk that Greece will unveil new austerity measures and plans to sell state assets more rapidly.

The European session also features the release of the final services PMI data with the main EMU release at 0758GMT and expected to confirm the preliminary estimate of 55.4. At 0830 GMT the UK final PMI is expected to tick lower to 54.2 from 54.3.

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