Not for the first time and probably not the last, today is once again the day of reckoning for Greece and the Eurozone. The story is all too familiar and the suggestions in the press are that the chances of a deal being struck look to be fairly slim. That’s all well and good, but time is naturally running out for a tidy resolution on either side. There remains only a marginal spill-over into other peripheral markets and the single currency remains relatively sanguine about it all. That is unlikely to continue if things are taken right down to the wire at the end of the month. Furthermore, the indications from Greece, both in polls and in public displays of support for the government, suggest that the government is not keen to show any signs of wavering.
Overnight, Japan has seen a return to growth in the GDP numbers for the final quarter of last year, with growth of 0.6% QoQ, although this merely unwound the 0.6% decline seen in the previous quarter. The yen was initially firmer on the release, although some of the initial downmove on USDJPY has subsequently been unwound. The standout has been cable over the past week, with the push above the1.54 level having been sustained. EURGBP is currently just above key support just above the 0.74 level. Note that inflation data is released tomorrow in the UK and will be a key focus after last week’s Inflation Report. Today is President’s day in the US, so volatility likely to be subdued as a result with no US data releases on the schedule.