Attention Shifts to Data as Greece Nears Deal

The prospect of a deal on Greece by Wednesday evening following months of tough negotiations is likely to keep the mood in the markets very upbeat this week.

I don’t think it’s a coincidence that Greece finally made a proposal to its creditors that they appear to be satisfied with a week before it would default on a €1.6 billion repayment to the International Monetary Fund. What we’ve seen over the last few months was probably carefully planned by Greek Prime Minister Alexis Tsipras and his Syriza party as they tried to get tough with the country’s creditors.

That said, the mood on Friday was very different from what is being experienced now, both inside and outside of Greece. The prospect of a potentially disastrous “Grexit” had become a very real possibility and people had started to accept this and prepare for the messy consequences. Fortunately, barring any breakdown between now and tomorrow evening, it looks as though the can may once again have been kicked further down the road. Although how far is still yet unknown.

Given all of the positive and optimistic comments coming from most officials on the creditors side, it looks very unlikely now that a deal will not be agreed by Wednesday evening that could then be signed off at Thursday’s summit. I’m not sure that would leave enough time for the funds to be released to Greece by 30 June but as long as the deal is agreed, in principal, I’m sure the IMF would afford Greece the grace period it last week rejected.

A deal would also mean Greek banks should retain access to the European Central Banks emergency liquidity assistance (ELA) program that has prevented capital controls being put in place up until now. Huge amounts of cash have been withdrawn over the last week, with around €1 billion lined up for withdrawal when the banks opened yesterday alone. Hopefully, with a deal now looking in the pipeline, the mass withdrawals at Greek banks should slow and ease the pressure on the ELA dependency.

Focus may now switch to the economic data in the eurozone, with the latest data showing the long drawn out Greek saga hampering economic sentiment in the region. Preliminary manufacturing and services PMI readings for the eurozone, Germany and France are expected to show this trend largely continuing, with only the French and Germany manufacturing sectors showing marginal improvements. This will not be a cause for concern among investors though as once the Greece deal is agreed, optimism in these industries will likely pick up very quickly.

Later on in the U.S., we’ll get core durable goods orders and new home sales data for May, as well as the preliminary manufacturing PMI for June, so there’s plenty of data coming today to keep us ticking over in the absence, fingers crossed, of all the Greek drama. I’m sure there’ll be continuous comments pouring out throughout the day but as long as they don’t hint at another breakdown in talks, the mood should remain far more positive.

The FTSE is expected to open 2 points lower, the CAC 20 points higher and the DAX 84 points higher.

Economic Calendar

For a look at all of today’s economic events, check out our economic calendar.

Content is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please access the RSS feed or contact us at Visit to find out more about the beat of the global markets. © 2023 OANDA Business Information & Services Inc.

Craig Erlam

Craig Erlam

Former Senior Market Analyst, UK & EMEA at OANDA
Based in London, Craig Erlam joined OANDA in 2015 as a market analyst. With many years of experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while producing macroeconomic commentary. His views have been published in the Financial Times, Reuters, The Telegraph and the International Business Times, and he also appears as a regular guest commentator on the BBC, Bloomberg TV, FOX Business and SKY News. Craig holds a full membership to the Society of Technical Analysts and is recognised as a Certified Financial Technician by the International Federation of Technical Analysts.