So Greece has finally presented the EU with reform proposals that were welcomed and there was a great deal of optimism as yesterday’s trading session saw a surge in risk appetite. That risk appetite is set to continue this morning with European equities looking to add to yesterday’s gains as clear political will power looks set to save Greece from default and a nasty exit from the euro, for the summer at least. It doesn’t look like Greece will receive any further debt relief, but their proposals have been all but accepted so we can pretty much rest assured that the €7.2 billion of bailout funds that have been earmarked for the country since the beginning of the year will finally be released later this week. This should get them to the end of August but the total of repayments due to both the IMF and ECB far exceeds this aid, with a further €2 billion due to the IMF in September and October. If this week concludes with agreement between Greece and its creditors it won’t be long before the next chapter in this drama.
Away from the Greece situation overnight Chinese Manufacturing PMI came in slightly better at 49.6 and today sees other European manufacturing and services PMIs that could lead to a move in EURUSD, already a little softer at 1.1265, with German and Eurozone data out this morning. Later in the day we see quite a bit of data with US durable goods, new home sales and a manufacturing PMI. The durable goods has the potential to move the dollar the most today, but this week for the greenback it’s tomorrow’s GDP revision has the most potential to have an impact.