Greek reforms put to vote
Yesterday saw the EUR claw back some ground against the GBP as some of the necessary actions to receive funding are being done and it looks as if the risk of non-compliance is eroding slowly. This hasn’t led to dramatic movements, but just enough inference from investors to see the GBP retreat vs the single currency over the last few days. Conversely, the GBPUSD has seen some fairly whippy trading during yesterday’s session, ending with the GBP gaining ground towards the afternoon and making further gains during the US trading time.
Picking up on China’s stock market and after several weeks of some fairly invasive intervention from their government, things are starting to appear more under control. There have been such significant losses and daily swings that many of the largest investors are understandably cautious, so a rally from here seems unlikely. Much has been made of the intervention both in theory and in practice, with some pointing out that this is not really a free market. If the government steps in every time prices fall, the prices will always elevate, which in itself is risky. There is now a cost to be determined not only of the intervention, but how about the exit from this support as well?
Alexis Tsipras, the Greek Prime Minister, is having the second bout of reform suggestions voted on today which has proved contentious of late. He will rely on votes from pro-Eurozone opposition parties in order to support and ratify the necessary items to receive bailout funding. While the opposition from his own party is strong, Tsipras said, ‘Up until today I’ve seen reactions, I’ve read heroic statements but I haven’t heard any alternative proposal’.
Today in the news, there are some significant releases to digest. First, Australian inflation data has already been issued. This was largely in line with expectations with contractions in the primary figures. This morning, we have the Bank of England minutes and vote on the interest rate, then an inflation report hearing later in the morning. To finish, there is some US housing data and lastly the NZ reserve bank’s monetary policy statement and interest rate decision as well.