Over the weekend and in recent days we have seen the Euro weaken on renewed fears surrounding Greece's debt. The Greek Interior Minister went as far as to say on Sunday that Greece will not be able to pay its next payment to the IMF which is due on the 5th June. In addition there has been pressure from Merkel and Hollande on Greece to reach an agreement on aid by the end of the this week.
Meanwhile the US Dollar has made gains after comments from FOMC Chair Yellen stated that labour markets are not yet at full strength but went on to say that she thinks it appropriate to take tightening steps “at some point this year”. This was further backed up by Vice Chair Stanley Fischer's comments who suggested that central bankers appear to favor an early rate hike. Does this mean that the door for a rate hike is ready for “lift off” in June? The market will keep a close eye on data between now and the next FOMC meeting for clues on Fed policy.
Looking to the day ahead much of the focus will be on the data from the US as the durable goods and the all important consumer confidence hits the wire. In addition, the US new homes sales are set for release.
The three day G7 meeting are set to begin. It will be attended by finance ministers and central bankers from Canada, Italy, France, Germany, Japan, the UK, and the US. High on the agenda will be global growth and the potential for a Greek default.
The G7 meeting will continue whilst the UK is set for a upward 0.1% revision in growth which could give Sterling a small boost. Meanwhile US data will remain under the microscope with the weekly jobless claims.
The G7 meeting will continue for a third day whilst the US is set for a huge downward revision to growth from 0.2% to -0.9%.