Eurozone monitors propose fresh Greek bailout deal

Wednesday, June 03, 2015

Eurozone officials have agreed to a bailout plan for Greece and are hopeful that the revised terms will be agreed to by the end of the week. The proposal will require deep economic reforms, a sticking point which has hindered progress over the past few months, and will be presented to Athens today. Creditors are hopeful that the revised terms will be welcomed by the indebted nation in time to release some €7.2bn of emergency funding ahead of this Friday’s deadline to repay the IMF its €300m loan. However, propositions for structural pension and labour reforms have been baulked at in recent talks and the condition that Greece runs a primary budget surplus of as much as 3.5% of GDP could be a difficult watermark to reach. The euro spiked higher yesterday on hopes that an agreement may finally be reached, gaining 2% against the dollar and touching 1.1192 briefly before settling at 1.1151. 

Australia’s GDP grew by 0.9% q/q during the first quarter as growth was driven largely by newly completed mines boosting exports and the RBA’s decisions to keep interest rates steady. Market participants had expected growth in Q1 to come in at 0.7% q/q but exports, adding 1.1% to GDP growth according to the data, helped lift the economy. With a substantial number of mining projects set to come online in the coming quarters the prospects for further growth remain optimistic as they ramp up to full production and exports continue to improve owing to a weaker AUD.

It’s a packed day for economic data releases today and we expect to see increased market volatility as investors respond to key data announcements. We’ve already had Chinese and Japanese services PMI readings, which both indicated healthy growth from the previous month, coming in at 53.5 and 51.5 in May respectively. Shortly we will have eurozone services PMI readings for May as well as eurozone unemployment and retails sales for April after which the ECB will release their rates decision. Over in the US, investors have ADP employment change data to look forward to as well as the US trade balance, both ISM and Markit services PMI, EIA crude stocks data and finally the Fed Beige Book in what is a jam packed session for macro releases.  

EUR spikes higher on hopes of fresh bailout deal

EUR Curncy Euro Spot Daily 03 2015 06 03 07 38 25

Events for today

0001

UK

May

BRC Retail Price Index

0245

JP

May

Markit Services PMI

0245

CN

May

HSBC Services PMI

0700

UK

May

Nationwide House Price Index

0900

EZ

May

Markit Services PMI

0930

UK

May

Markit/CIPS Services PMI

1000

EZ

Apr

Retail Sales

1000

EZ

Apr

Unemployment Rate

1245

EZ

May

ECB Rates

1315

US

Apr

ADP Employment Change

1330

US

Apr

Trade Balance

1445

US

May

Markit Services PMI

1500

US

May

ISM Non-Manufacturing

1530

US

w/e

EIA Energy Stocks

1900

US

May

Fed Beige Book

Topics: GDP, PMI, EUR, IMF
More from: Kash Kamal