EU’s ‘expectations are low’ for Greek solution this week

There was little change on the markets as we approached the afternoon, leaving the Greek-Euro discussion the firm focus of the day.

There have been suggestions that Vaorufakis will ask for a bridging loan to last until September, and would accept 70% of the current debt whilst offering to come up with a new plan for the remaining 30%. This loan bridge especially would ease the markets as it gives a larger window for a new deal to be worked out, and kicks the time crisis part of this Greek epic down the road.

However, at the same time as this rumour, Panos Kammenos, the leader of the junior coalition member Independent Greeks and the current defence minister, said Greece could look elsewhere for funding, i.e. the USA, Russia or China. Whilst Kammenos doesn’t have any jurisdiction over the finance ministry, it reflects a growing discord inside Greece, and the rejection of any move towards compromise by many in the country. With the EU Commission stating that ‘expectations are low’ for a final resolution to the issue this week, and the Greek’s adamant they won’t be ‘blackmailed’ the markets look set for a prolonged period of Greek-inspired uncertainty.

Whilst Brent Crude continued to hold into its $57 per barrel mark, with the commodity continuing to show the signs of resilience it has built up in the past two weeks, this wasn’t enough to buoy the FTSE’s energy sector ahead of Tullow Oil’s full year release tomorrow. This meant the FTSE continued to suffer, first under Eurozone uncertainty, then under the declines in the UK’s manufacturing and industrial production and now under the poor performances of Tullow Oil and Premier Oil joining the falls by Vedanta and Antofagasta as copper slips to $253 per pound.

Finally, the US markets closed marginally in the red last night as the Greek-debt-disease spread across the globe. A Fed statement from Jerome Powell did nothing to enliven the markets, and with little in the way of data, the US markets will continue to look to Europe and the continued disappointment of this earnings season. Coca-Cola is expected to announce its Q4 2014 results before the bell as yet another multinational giant is set to suffer from the stronger dollar, with PespiCo likely to present a similar downward trend tomorrow. If the US markets are to find any inspiration, it may come from noted-hawk, and Fed member, Jeffrey M. Lacker, who gives a statement later this afternoon.