Greece dominated the markets again yesterday as signs of no imminent deal look particularly likely. With increasing speculation of a debt default, Alex Tsipras, the Greek Prime Minister warned that the last repayment made to the IMF of €750 million would not be made without help from the European Union. However, the payment was ultimately made with Greece having to tap into funds they already held with the IMF.
Negotiations of new reforms being put in place are not meeting the IMF and EU requirements. The Greek government are coming under even more pressure as the need for cash to pay pensions, wages and other loans to the IMF next month, tick closer to maturity. Could Athens default and go bankrupt?
Today’s focus will be on the U.K. The inflation figure is released at 9.30am, with market expectations for the yearly gauge to remain anaemic at 0%. Bank of England Governor Mark Carney commented in last week’s inflation report, that deflation (below zero) could be seen at some point in the short term due to the low oil and energy prices. Volatility for the Pound will be seen as this reading is released.
The German ZEW economic sentiment is released this morning, along with the Euro ZEW sentiment figure with both readings forecast to decline. Building permits in the U.S. are due in the afternoon with markets expecting a slight increase on the previous months.