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Greeks vote yes on bailout

Greeks vote yes on bailout

After an all nighter, the Greek parliament has decreed that they support the bailout package that means they get their hands on possibly 86 billion Euros in order to branch their debts and ensure they satisfy loans as part of the economic reforms that are ongoing in Athens. The GBPEUR has responded by easing back under the key 1.4000 figure and as markets open, further digestion seems set to take place.

The GBPUSD simply wallowed by contrast and aside from a brief dip at the beginning of play, traded sideways for the majority of the day and no significant changes to the exchange were made.

The details of the bailout plan ratified by the Greek parliament, including Prime Minister Alexis Tsipras’ party and pro-Eurozone opposition suggest that serious concerns were raised over the ability of Greece to repay the debts accrued during the course of their economic strife. Interest rates on the loans are very low, the maturities very long and still there exists serious doubts over their ability to satisfy what they owe.

The increasing struggles in China and ongoing issues in Greece have taken their toll on the German economy, as they post an expansion that was less than forecast. Expectations of their GDP figure were of a 0.5% increase but instead they listed 0.4% – barely better than their last figure of 0.3% (normally you would expect the GDP figures throughout the year to steadily increase). Global demand is weak currently and, as an exporting powerhouse, the German economy has not gained traction.

Today, all eyes will be on the Eurozone GDP figure due at 09:00 GMT and forecast largely for a slight improvement. We receive the key inflation data concurrently and this is forecast for a slow down month on month, but on year an increase. Later, the US Producer Price Index will give clues to their price changes and perhaps fuel (or otherwise) conversations of an interest rate change.

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