Spreadex Market Update
IMF report calling for Greek debt-relief adds fresh kink ahead of referendum
In a report that lends credence to the claims of Tsipras and Varoufakis, even if the IMF did also implicitly blame the Syriza party for the economic deterioration in Greece since it came into power, the Washington-based institution stated that the country needs an extra €60 billion relief program alongside debt relief in any new deal and a 20 year grace period for any repayments. Given how vocal Christine Lagarde has been about Greece’s ‘behaviour’ throughout negotiations, and the fact that she remains firmly onside with the creditors’ hard line, it’s interesting to note the timing of this report, which would appear to support the ‘no’ vote on Sunday, at least in the very basic terms of rejecting the concept of the non-debt relief deals offered in the past month.
Yet there is still a chance that the referendum might not go ahead, with the Greek Council of State to vote whether it breaches the country’s constitution. Whilst the body is likely to give it the all clear, it adds another shade of uncertainty to a situation defined by its instability. Said instability continued to weigh on the Eurozone indices after the bell, especially with fresh pressure on Europe to at least acknowledge the IMF’s findings exacerbating the strain between the two sides of the debt divide.
After posting some decent gains in the face of a declining Eurozone, the FTSE opened Friday rather flat with a quiet day on the horizon. The only piece pf data the UK has to offer this morning is the latest services PMI, which is expected to beat last month’s figure. Thursday saw a strong construction PMI boost the UK index, so today’s figure could do the same today if analysts’ forecasts are correct.
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