Two new developments have served to
further heighten tensions between Greece and its creditors in the EU and the
IMF. It appears that the previously ever-patient Jean-Claude Juncker, President
of the EU Commission and the man often seen smiling at and back-slapping the Greek
Prime Minister, Alexis Tsipras, has reached the end of his tether. At the G7
meeting in Bavaria, he is reported by the Guardian newspaper to have become
very angry at the repeated delays by Tsipras in presenting proposals to counter
those put forward by the EU and the IMF last week. The Greek government has
long been at loggerheads with the ECB and Germany. They can ill afford to lose
the goodwill of such as the Commission president.
Separately, while Greece was able to
legally, if highly unusually, opt to roll-up all of its remaining repayments to
the IMF into one large payment which will become due next month, the IMF
Managing Director, Christine Lagarde, has firmly rejected any possibility that
this payment can itself be delayed. She used the same formula that Mario Draghi
often brings forward, that the IMF is a “rules based organisation”, and so such
a postponement is simply not possible, even if it were desired to give Greece
such a concession.
It is now acknowledged by all that
Greece has come to the end of the line in terms of producing funds from
anywhere, so in the absence of agreement to unlock further IMF and EU funding,
it will default.
Non-Farm
payrolls do the business
The US dollar was on a tear in the
afternoon on Friday, rising against all of its global counterparts on the
release of much better than expected Non-Farm Payroll figures by the US Bureau
of Labor Statistics.
Reuters is reporting this morning
that a number of commentators in Asian Forex trading institutions have
intimated that it is their belief that the Federal Reserve will now raise rates
not once, but twice this year. They have timed the first one for next September,
with a further rise before the end of the year.
The US economy might not be out of
the woods yet, however. Despite the excellent headline figure, and the fact that
the last two months’ figures were revised upward, the unemployment rate has
still risen, to 5.5%. This is, apparently, due to the fact that more people are
coming back into the workforce and are actively looking for employment, now
that the prospects of finding a job have improved.
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