Wednesday is crunch day for Greece as the all agreements in the final proposal with the Eurozone creditors must be enacted today before the Eurozone will move forward with partial funding to help Greece move forward. The ECB is keeping the ELA frozen at 89 billion euros which has all been used leaving no funds for the banks which remain closed until Thursday as the government continues the banking holiday. The euro has bounced around the 1.10 level since the agreement was reached. Traders are watching the ECB closely as Mario Draghi might indicate that the central bank will increase or extended their monetary stimulus program to help the economy recover from the Greek stress. Draghi is also expected to discuss funding for Greece on Thursday. Most analyst are expecting Draghi to slowly increase the ELA to help fund the Greek banks. European shares trade mixed today as investors await the outcome of tomorrow’s Greek vote in parliament. In the US, Equities opened slightly higher, despite weaker than expected eco data.
The euro is trading at 1.1009 and against cable the euro is trading at 0.7061 down over 40 points as the pound climbed today after comments from the Bank of England Governor.
Governor Carney warned today in a testimony before lawmakers that households should start to prepare for higher borrowing costs as the economic recovery gathers momentum, though the central bank would raise rates only slowly. BoE’s Miles added that the first rise in borrowing costs clearly is coming and it was not a bad thing.
The US dollar eased a bit today on lackluster data ahead of Janet Yellen’s testimony. The greenback is trading at 96.83. The dollar declined after an unexpected fall in retail sales. Sretail sales slipped 0.3 percent last month, the weakest reading since February, as consumers cut back on purchases of automobiles and other goods, according to a Commerce Department report. Excluding automobiles, gasoline, building materials and food services, core retail sales dipped 0.1 percent following a 0.7 percent gain in May. Economists polled by Reuters had forecast retail sales rising 0.2 percent. Core retail sales had been expected to increase 0.4 percent. Binary option investors are expected to remain cautious ahead of scheduled testimony on Wednesday and Thursday by Fed Chair Janet Yellen. Investors expect the Fed to start raising rates later this year, in contrast to the European Central Bank and the Bank of Japan, which are seen continuing with their ultra-loose monetary policies for the foreseeable future.
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