Last week much of the focus was on Greece with regards to the ongoing debt situation. Developments really gathered speed over the weekend after a week of tough negations. After the markets closed on Friday, Greek PM Alexis Tsipras announced that he would put the decision as to whether the nation would accept creditors terms to a national referendum to be held on Sunday 5th July. Since then, the Eurogroup has confirmed that the EFSF Greek loan programme will expire on 30th June without an extension, whilst the ECB has capped emergency liquidity assistance program to Greek banks. In order for the government to reduce the chance of a bank run ahead of the referendum, they have imposed a 5 day bank holiday and a daily cash withdrawal limit of €60 and bank transfers or payments abroad are restricted to vital pre-approved commercial transactions. A payment of €1.6bn needs to be made from Greece to the IMF tomorrow.
Meanwhile whilst much of the focus will remain on Greece, it is also worth noting that trading volumes could be light approaching the back and of the week as the US celebrate Independence Day this weekend. As a result, the all-important US Non Farms payrolls and unemployment rate are set for release a day earlier on Thursday this week.
Quiet start to the week in terms of data, but this will be made up for with regards to newswires surrounding the latest reaction to Greek moves over the weekend.
Newswire will continue to dominate the markets surrounding Greece, which will intensify with the Eurogroup meeting happening today. In addition, there is a raft of data from the Eurozone and UK but this is likely to take a back seat to rhetoric from the Eurogroup meeting. Crossing the pond, the key figure markets will focus on US consumer confidence. Greece could be looking at a default today if they miss their payment to the IMF.
Focus will move onto the UK and US today. From the UK, BoE Gov Carney is due to hold a press conference about the Financial Stability Report. The markets will be looking for clues on interest rate policy after rumours of an early rate hike could be on the cards. Meanwhile, we will get an early indication of how the all-important jobs numbers will look with the release of the ADP employment report.
It is likely that liquidity will thin after today as the US taper off to celebrate Independence Day on Saturday. Dominating the docket will be the all-important US Non Farms Payrolls and unemployment rate. In addition, ECB Draghi is due to speak and will surely be pressed on any further development.
With lighter liquidity expected on the eve of the 4th July, US holidays price action could be more volatile. In terms of headlines, much of the focus will be on the Greek referendum on Sunday and the potential fallout from it. Meanwhile service sector data form the UK will be closely monitored.