A Greek ment in place after weekend long talks

13 July, 2015

Rob Bastin

Last week finished off with markets re-acting to the latest proposal submitted by the Greek Prime minister, with increasing optimism that a deal would be struck over the weekend. Last weekend we saw zero risk appetite after a NO vote in the Greek referendum, with the Euro and Sterling coming under selling pressure throughout the week, whereas the safe haven currencies like the US Dollar and Japanese Yen strengthened the most with investors seeking greater security amidst grave uncertainty. Friday’s trading saw a reversal of these positions ahead of a potential deal for Greece, with the Pound and Euro gaining around 2 cents against the USD and 3 cents against the Yen.

All eyes were then on the Euro-group meeting on Saturday and the EU emergency summit on Sunday to await details of the latest Greek proposal and whether it would be sufficient to strike a deal with creditors. After a weekend’s troubled negotiations, talks ran right through the night where the result was an ultimatum from Euro-zone leaders, approve a newly proposed bailout and set of reforms by Wednesday or face a Grexit. It appears the final hand has now been dealt to Greece with their parliament now responsible for approving the latest bailout terms in the coming days to save its countries position in the Euro-zone. This poses a very difficult situation for the Greek’s themselves who last weekend voted against any tough bailout conditions, such as those that may be approved this week to rescue Greece. Greece have been offered a €50bn privatisation fund to recapitalise the banks, along with a bridging load to help finances until the deal is ratified.

More interestingly Greece’s anti-austerity laws set it February will be repealed. So a deal and terms are now in place, but currency markets remain relatively unchanged until the deal is approved by parliament, which remains a big questions mark when considering the necessary details and effect on the Greek people.

Whilst the weekends’ events are likely to drive exchange rates over the coming days, there are still a few other key announcements to look out for that are likely to make for another volatile weeks trading.

9:30am (UK) – Consumer Price Index (Inflation)
1:30pm (US) – Retail Sales

9:30am (UK) – Unemployment Rate / Average Earnings
2:15pm (US) – Industrial Production
3:00pm (CAD) – BOC Interest Rate Decision

10:00am (EUR) – Consumer Price Index (Inflation)
12:45pm (EUR) – ECB Interest Rate Decision & Conference

1:30pm (US) – Consumer Price Index (Inflation)