Morning Markets: Acropolis now
- Germany: Ifo Business Climate Index (0800 GMT)
- United States: Weekly Mortgage Applications (1100 GMT)
- United States: GDP third estimate (1230 GMT)
- United States: EIA Weekly Petroleum Status Report (1430 GMT)
- Greece: Greek PM Tsipras meets ECB, EU & IMF officials in Brussels (1200 GMT)
- Greece: Eurozone finance ministers meeting on Greece (1700 GMT)
As Greek prime minister Alexis Tsipras heads into another grueling round of Brussels meetings in his ongoing battle to persuade his creditors to unlock some EUR7 billion of emergency cash to avert default on June 30, the murmurs of mutiny back home are growing ever louder.
But while many observers reason that default, followed by Grexit, would be the only logical conclusion to this whole sorry saga, it's worth remembering the geopolitical and strategic factors that argue against a Greek goodbye. Most compelling among these is the fact that the US would not welcome any loosening of ties with Greece – a key NATO ally – and would be aghast at any prospect of the Greeks cosying up to Russia and Vladimir Putin. For that reason alone, pressure from the US to keep Greece within the fold should soon emerge.
Elsewhere, things are rather thin on the data front. Today’s Ifo business survey update is likely to show a modest dip in the German business climate. Over in the US, housing is headed for stronger growth in the second half of the year, and today's mortgage applications figure should show an improvement. Furthermore, the revised US GDP report should reveal good news about the economy's first quarter performance.
- Japan's Nikkei N225 rose 0.5% today to reach an 18-year peak
- BoJ policy board minutes – members forecast higher inflation
- A light day of data has seen USD/JPY trade above 124.11
- The Nikkei 225 Index trades higher along with other Asian indices.
- A Chinese economic index released overnight proved a little bit lower than previously
- AUDUSD and NZDUSD trade at .7726 and .6865 respectively.
- In the Yen crosses, we see AUDJPY and NZDJPY trade at 95.73 and 85.06
- Front end risk reversals in EURUSD are popular, 300m per leg trading at differential 2.0
- Monday strikes in EURUSD options are trading at around the 12.0% level
- EURUSD one month straddle opening today at 11.9%
- As USDJPY rallied, front end volatilities were supported.
From the Floor
Alpine oddity. ”I’m surprised that USDCHF has not responded more positively to the Greek negotiations,” says Hardy
Bonds fillip. “There’s been quite an uptake in risk-on sentiment supporting markets here,” says Boye
Get all the latest from Saxo Bank's trading floors in From the Floor, within the hour.
With Alibaba injecting a cool $1bn into Koubei, the Chinese food and consumerables delivery app market is about to get very messy, says Neil Flynn
RBNZ in a pickle
When New Zealand's Minister of Finance says the Reserve Bank governor has been “out of the zone" you know there's likely to be change somewhere, says Max McKegg
Q1 was disappointing, but James Picerno says that the US is heading for a H2 rebound, helped by an improving jobs market, rising home sales, easier lending and rising consumer spending.
Juhani Huopainen believes that while the Eurozone could handle even a worst-case scenario Greek default in financial terms, the political fallout from default could still force a Grexit.
QE is working
Tentative green shoots of a nascent Eurozone recovery can be seen in the region's latest data releases so Stephen Pope reckons that the ECB's bond buying programme is having the desired effect. But Greek worries still loom large.
Whispers from Brussels suggest that a Greek debt deal is nigh. Really? Ken Veksler cautions us not to count our chickens before they're hatched.
EURGBP has been travelling in a sideways chop for months now but Clive Lambert forecasts it may plunge off a cliff because of the Greek drag.
Rule Britannia. Sterling should benefit from the euro's Greek-inspired rout. Pic: iStock
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