Daily Market Analysis – 15th June, 2015
By FxGrow Research & Analysis Team
Fears of Greek Default Rise after talks break down
On Sunday night talks between Greek ministers and its European creditors collapsed after a new economic reform proposal submitted by Athens was deemed inadequate to continue negotiations.
Germany has given a clear warning that Greece could leave the Eurozone as officials were unable to reach out a last-minute deal in Brussels.
“The shadow of a Greek exit from the Eurozone is becoming increasingly perceptible. Greece’s game theorists are gambling the future of their country and Europe’s too” - German Vice Chancellor, Sigmar Gabriel.
Greece needs to repay €1.6bn to the IMF by June 30 or risk default, and a possible exit from the Euro. It also needs to repay €6.7bn when Greek bonds held by the European Central Bank fall due in July and August this year.
Greek default and exit from the Euro could trigger some huge moves in the markets and will have a damaging effect on countries that are part of the Eurozone.
"We want to help Greece and keep it in the euro. However, not just time is running out but also, everywhere in Europe, patience. All over Europe there is a growing sentiment: Enough!" - German Vice Chancellor, Sigmar Gabriel.
Greece is under pressure as it also needs another €1.5 billion to pay public sector wages and pensions and it cannot do so without the bailout funds.
The Greek government is blaming its European creditors and IMF who financed its 240 billion Euro bailout program in 2010, for sticking with demands that are economically senseless and politically unacceptable to the Greek citizens.
Manufacturing industry in the Euro zone rebounded by 0.1% in April lower than analyst expectations of a 0.4% gain. Largest contribution came in from Germany and France. A new report from the World Bank forecasts the Euro area's GDP to increase by 1.5% this year.
US Producer Prices rose to 0.5% in May indicating signs of an economic recovery as the world's biggest economy is getting back on track.
In Japan Industrial output rose by 1.2% in April while exports climbed to 0.6% supported by a weaker Yen.
"There's a large majority of bond investors who think the next move by the Bank of Japan is going to be more easing" - Morgan Stanley MUFG Securities Co.
Crude Oil is down to $59.51 on concerns over a global oversupply versus the demand.
Gold is trading lower in the Europe at 1174.30 while Silver is weak at 15.87
15th June 2015 – 10:11hrs GMT
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