- Greece IMF deadline spurs June 22 emergency Eurogroup/EU summit. Both Tsipras and Merkel will be in attendance but whether either side concedes remains an open question. If an agreement is not made, the next key event risk is the special summit planned for June 25-26. If it becomes necessary, emergency meetings could be held on a daily basis into the weekend and the June 30th deadline. Last minute deal still expected. Relief rally also expected on a last minute deal.
- Euro area PMI surveys poised to soften again. In the long run, the Eurozone is better off without Greece. PMI reports could show how much the Eurozone is benefitting from Quantitative Easing and a weak currency.
- Markets seek solid evidence of Q2 rebound in US activity; US september rate hike still on the table.
- Gbp continues to be driven by Greek-EU turmoil at present, with safe-haven inflows likely to persist into July. Further ahead political uncertainty could ( but not should) reassert itself, but in the week ahead it should be reasonably plain sailing for the Pound.
2. Calendar
Not much data at all to start the week.
Source: FXStreet.com
3. A look around the markets
Eurostoxx and Dax are still clearly bearish, whereas other indices are a little choppy still - except for Russell. The Vix is holding 16s...watch your downside.
Energy sector not brilliant...but not yet a clear sell either.
Bonds: short end really rallying on bad US data, showing delayed
rate hike expectations. The long end is also relatively buoyant.
In FX, Nzd is the clear bear and Gbp remains the clear bull. USD is
losing some shine and crosses might be easier to play at this
juncture until the USD shows more decisive action.
We continue to like GbpNzd longs especially.
Good Luck this week!
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