Afternoon analysis 30.06.2015:
There is some chance the Greek government will reach an agreement with the country's creditors. The euro was supported as the atmosphere improved. Also, the zloty exploited the impact of investor's relief. Mixed reports from the US.
Today's session was the next phase of the Greek crisis. 30 June is a very important date. Today, Greece was expected to pay a 1.6 billion euro bill to the International Monetary Fund. Moreover, the current bailout program expires today. Earlier, investors believed that the Greek standoff would have ended by now.
Currently, we are facing information chaos. Earlier today, the Greek Finance Minister Yanis Varoufakis said that his country won't pay the IMF bill. However, he expressed hope for a deal anyway. As a result, the country would default. For the first time in history, a developed nation would be bankrupt on the IMF debt.
But later, there were some rumours that there is a chance for an agreement. Allegedly, the Greek Prime Minister Alexis Tsipras was expected to travel to Brussels to meet the European politicians and discuss an agreement. Earlier in the day, the Greek government chief spoke with the European Commission President Jean-Claude Juncker and the European Central Bank President Mario Draghi.
However, it was not clear whether Athens made a new proposal or creditors are willing to make any concessions. The German Chancellor Angela Merkel said that she has not seen any new offers.
In the meantime, the German Finance Minister Wolfgang Schaeuble tried to calm the nervousness. He told lawmakers that Greece will remain a part of the eurozone, even if the Sunday referendum is negative for a new bailout program. The information was given by the Bloomberg agency citing unofficial sources.
Later in the day, there was information that Greece asked for a new bailout program from the European Stabilization Mechanism, which includes a debt restructuring plan. The program would last two years. What is more important is that the IMF would be excluded from the program. The Greek government criticized the Washington-based institution for obstructing the negotiations. Now, the key factor to watch is the response from the European politicians.
Today's reports from the US were mixed. The Chicago PMI index disappointed again. It rose to 49.4 from 46.2 in the previous month. A result below the forecast. Moreover, the housing market data also missed the forecast. The S&P/Case-Schiller index that tracks home prices in the 20 largest US cities increased 4.9 percent. A result below the forecast and less than the previous month’s reading.
However, the data on consumer sentiment exceeded expectations. The Conference Board consumer sentiment index increased to 101.4 from 94.6. It was above the forecast. Some improvement in the household sentiment came after reports showing consumption strengthening (reports on retail sales and expenditures exceeded forecasts). This was a positive premise for the US economic growth, as consumption adds up to 70 percent of the GDP.
The EUR/USD volatility was smaller than it was yesterday. However, the volatility will return, if there is new information on a possible deal.
Tomorrow the PMI report is scheduled. However, the report will not influence the Polish currency as the Greek crisis has not ended.
Today, the zloty was quite calm. The Polish currency is waiting for news concerning the Greek crisis. This factor will be most important for the Polish currency, until the standoff has come to a close. Currently, the zloty remains under the pressure of the risk aversion.
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