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The Calm before The Greek Storm

The Calm before The Greek Storm

Today seems to be the calm before the storm as the market awaits the Greek Referendum and the results it will bring. In anticipation of a busier and more volatile time on the markets, the US have taken their 4th July holiday on July 3rd and US markets are closed.

This meant that US non farm payroll data came out a day earlier than expected. Over 223,000 jobs were added to the US economy which was in line with expectations, but no rise in hourly earnings and a drop in workforce participation lead to a muted response from the markets.

In Greece, it appears that they are physically down to their last €500m as even with a €60 limit per person, stocks are dwindling. Banks are expected to re-open on Tuesday, where the cash comes from is anyone’s guess. As Sunday approaches, most commentators are hesitant to predict which way the vote is going to go. This has not been helped by Bloomberg’s latest poll which indicated a split result – 43% said they will vote “no” and 42.5% were on the “yes” side.

Greek Finance Minister Varoufakis has said he will not continue in his post if the “yes” vote succeeds, saying he would rather cut off his arm than sign the deal. However, PM Tsipras has said that they will reopen negotiations with their creditors within 24 hours if a “yes” vote is passed.  However, it may not be that easy. Will the Eurogroup be so anxious to get back round the table with the Greeks when they have been playing by their own rules?

Expect huge volatility before we get into the office on Monday morning. Where the Euro goes, who knows…

Have a good weekend!

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