Efforts continue to step up across Europe as Greece yesterday put forward a further proposal of reforms to the ECB, IMF and European Commission, though it remains to be seen whether it will be enough. We will watch for comments over the course of the day, but the Eurozone leaders meeting does not start until 6pm, so we may have sharp moves overnight. In the lead up to this, Tsipras is certainly using interesting negotiation tactics with his trip to discuss working more closely with Putin in Russia.
Meetings, meetings, meetings
More information continues to emerge from the discussions over the weekend, with talk of a new plan extending Greek aid to September or December, with 6 billion euros coming from the ESM. Greece’s cabinet is apparently meeting at 11am to discuss bailout talks (and hopefully to agree what concessions can be made).
Elsewhere in Europe, the Eurozone finance ministers meeting has been brought forward by a couple of hours to 10.30am. This meeting ahead of the Euro Summit this evening will no doubt aim to have a workable proposal for reform to discuss.
The ECB will reportedly hold an emergency meeting to decide whether further emergency funding is required for Greece’s banks as savers continue to withdraw euros. Demonstrators gathered in Greece to protest about the ongoing austerity measures, with further rallies in solidarity with Greece in Amsterdam and Brussels.
With so many talks underway around Europe and very little by way of data, we could be in for a rollercoaster ride for the euro, though sterling continues to look unfazed by the Greek situation, hitting 1.59 again overnight.
US rates hikes finely balanced
A couple of Federal Reserve speakers on Friday night added colour to the Fed’s thinking, showing that it is finely balanced, with Williams not convinced there is evidence of higher inflation (and therefore the need for higher rates), and Mester commenting that the economy can withstand that first 25bps rate hike. We’re still aiming for September or December, which worryingly, could be where the current Greek situation can is kicked down the road to.
