Tspiras fails to deliver on election promises
Yesterday we saw the Greek left wing government finalise and present plans to their international creditors, in a bid to be granted a vital four month extension on Greece’s debt repayments. The proposal shows a crackdown on tax evasion and overhauls the country’s minimum wage, but is widely regarded as a major climbdown for Greek PM, Alexis Tspiras, who not so long ago vowed to reverse budget cuts.
On Saturday Tspiras said that his government had “won a battle, but not the war”. With the reform approved and the deal removing the immediate risk of Greece running out of money, the country has been given that all important time to negotiate further changes to the terms of its original bailout.
Yesterday we saw the markets move in anticipation of last night’s verdict, with GBP/EUR moving from the low €1.35s to the low €1.36s, as shown in the graph below.
Potentially a busy day on the markets today, as we kick with German GDP and euro core CPI. Germany is seen as the powerhouse of the eurozone and a negative GDP figure could weaken the euro further against its counterparts.
The ECB will also be meeting to unveil a new 20 euro bank note, but no doubt talk will turn to the Greek debt and we could see further volatility nearing the end of the day. Across the pond we have consumer confidence and market services PMI – a positive reading could strengthen the dollar and put the US a step closer to a potential interest rate rise.
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