Greece has until Sunday to come to an agreement with creditors or they risk being kicked out of the Euro imminently. Greece however, have toned down the debt relief rhetoric by committing to repay the IMF. Greek PM Tsipras said that Greece intend to clear its arrears, as it seeks additional funds from the Eurozone. Tsipras said in a government issued letter to the European Stability Mechanism “Greece is committed to honour its financial obligations to all its creditors in a full and timely manner.” This led to Euro strength throughout the day yesterday.
George Osborne unveiled his latest budget yesterday. The budget didn’t rattle the markets as Osborne provided additional details on plans to cut government spending. Growth was revised down for 2015 to 2.4% from 2.5%, with forecasts to grow to 2.3% next year. However, there were no glaring changes to hinder the Bank Of England’s plans for an interest rate rise next year.
The Federal Reserve minutes were released last night from the meeting held on the 17th of June. With markets trying to gain an insight into when the US are likely to raise interest rates, we were left with no further concrete clues as to when lift-off will be. Fed officials again left a broad guide of how the decision will unfold, stating that information indicating that labour markets conditions were continuing to improve, that inflation was moving back towards the committees 2% target and that economic growth was strengthening. Among the Fed’s worries was the uncertainty of Greece and if an agreement will be reached with its creditors and the economic growth abroad especially in emerging market economies. Although not completely out of the picture, a September rate rise this year is looking less likely for the US.
The busiest day of the week sees UK politics dominate the day session whilst focus switches to the US central bank in the evening. Wednesday’s budget has been claimed by Chancellor George Osborne to have “laser like focus” in regards to productivity and living standards. In the evening, the FOMC release their latest meeting minutes where markets will be fixated on any signaling device or commentary from the Fed. After the mixed jobs data last Thursday, a September rate rise stills the market favourite, however all could change after this release.