The first week of every month is a
busy one for economic announcements, and June will be no exception. Greek
bailout negotiations with the EU and the IMF continue to rumble on. It would
appear that the promised resolution “by Sunday” has not materialised, although
Alexis Tsipras, Greek PM, had a conference call with both Angela Merkel and
Francois Hollande yesterday, according to the newswires. There are no reports
of any breakthrough having come out of this.
Discussions at a very lively lunch
that your commentator had yesterday with senior figures in insurance and
banking did not reach any kind of consensus either. These two avid watchers of
the economic situation were evenly divided on the question of whether the EU
will want to allow Greece to default and leave the Euro. Every angle was
discussed, including the apparent desire of most Greek people to remain in the
Single Currency and the shock to the Euro system that the mere precedent of a
member state leaving or being forced to leave would produce.
Meantime the EURUSD pair remains in
middle of the range it has established since the end of January, which is centred
on 1.10 US dollars to the Euro, although this is firmly below the 200 Day EMA,
which is a bearish signal (see chart above).
Non
Farm payrolls, two central bank meetings and inflation
This week will see the monetary
policy statement and press conference from the ECB, on Wednesday, and the Bank
of England Monetary Policy Committee meeting on Thursday. Inflation figures will
be released for the Eurozone on Tuesday. The most important announcement of
course will be the US Non-Farm Payrolls report on Friday. Last month this
bounced back to trend after seeing a reduction previously as a result of the
poor weather condition Stateside over the Winter. The market is expecting a
figure in advance of 200k and anything less than that will impact the US dollar
negatively.
On Wednesday the private company,
ADP, will release its own estimate of payroll figures. These sometimes
correctly anticipate the official NFP numbers, and sometimes they do not.
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