Just two hours before the midnight deadline, the Greek PM Alexis Tsipras handed a new reform proposal to the EU. This is possibly the last attempt for Greece to reach an agreement with its creditors and to secure a further bailout. This new proposal will be studied by the Eurozone leaders over the weekend ahead of the meeting on Sunday evening. The new measures put forward by Athens are said to be increasing taxes on companies, unifying VAT rates to 23% and phasing out solidarity grant for pensioners by 2019. With the Greek people already unanimously voting for a no to further austerity cuts, these new reforms presented by Alexis Tsipras are including further austerity, it is in exchange for Greece seeking a further €53.5bn as part of a new package.
The IMF cut its forecast for global growth this year, citing the cold weather in the US that occurred during the first quarter. Also effecting growth was the financial market turbulence from China and ongoing Greek exit. The world economy is forecast to grow 3.3% in 2015, 0.2% less than the pace projected in April by the IMF. Next year’s IMF growth forecasts remain unchanged at 3.8%.
Meanwhile, there was no new surprises from the BoE who kept interest rates on hold as expected. The market will now await the minutes in just under a fortnights time for clues on interest rates with speculation starting to build about a 2015 interest rate hike.
Fairly quiet back end of the week but there will be focus on the UK as the release of the UK’s imports and exports are due. We also have Fed chair Janet Yellen speaking at 5pm BST, anything untoward here could spark Dollar volatility. Finally, keep your eyes on any Greek news that will surface today and over the weekend as well.